Originally posted by tony wpb:
Hello Foundation,
i would be interested , if you could detail your successes so that we can all ascertain the level of your insight.I have already detailed my investing history on this site. Use the search function. Current real estate investment situation is one PPOR and a modest beach house. I have no immediate…[Read more]

Incidentally, I just found the original article, complete with pretty graphs.
Enjoy:
Link Here

Can you also ples let a novice like me know Foundation, how is the Real CG calculated on your table (second last column).
It’s just the difference between how much the asset should be worth if you adjust for inflation and how much it’s actually…[Read more]

I know you are but what am I?[biggrin]
Dude, at least I’m prepared to make a case!

It is this simple – short of a collapse in the US dollar#, rising US interest rates narrow the interest rate differential between the US and Us. Foreign investment flows to the US rather than Australia, placing downward pressure on the Australian dollar. This is…[Read more]

A slightly different set of numbers to the REIV medians… but anyway, here’s the way I prefer to look at numbers:

Year MED$ NomCG CPI* RealHPI RealCG CG2005
1990 147k – 3% 8.0% -11.0% -$16k -$24k
1991 142k – 3% 5.3% – 8.7% -$12k -$17k
1992 136k – 4% 1.9% – 6.1% – $8k -$11k
1993 145k + 7% 1.0% + 5.6% + $8k +$11k
1994 146k + 1% 1.8% – 1.1% -…[Read more]

Originally posted by nkibel:
Dont you love these people. They spread doom and gloom without trying to explain there reasons.
As opposed to those who make interest rate predictions without basis?
Recall this:
Interest rates in Nz and Australia in the medium term will either stay stable or move down. Even if they do increase it wont be by much. It…[Read more]

are you suggesting there are better ways to invest your money at the moment then IP’s?If by ‘IP’ you mean a standard residential property yielding 2-7%, then yes. If you mean a ‘cashflow positive’ house in a country town, then absolutely yes.
I have two IP’s and a small parcel of shares and I doubt the level of excellent performance from either…[Read more]

Sorry Ian, either you or I forgot to push the sarcasm button. Clearly no rational person can expect any house purchased today to be worth double in ten years (without some property-specific external influence or inflation-driven 12-15% interest rates).
Cheers, F.[cowboy2]

I disagree with Nigel. I think the capital growth prospects for apartments in Melbourne city are bugger all and none for the foreseeable future (I’m talking many, many years here not 18 months.) Given the ongoing costs associated with holding this asset while it loses more value (in real terms, and perhaps even nominally), you may well be better…[Read more]

If you plan to capitalise on this “TT Theory”, I’d suggest you wait untill the sheep have reacted rather than beating them to it.
In other words, if TT or similar manage to convince the amateurs that house prices are falling, not only will many more be inclined to sell, but they will also be more receptive to low offers. The whole thing will…[Read more]

I am sure that you have a perfectly good and reasonable excuse for no action.
Perhaps your kids will understand.
Why thank you Colin. Thank you for making me sick to the stomach.
Regardless, F.[cowboy2]

Phew… I give up.

Originally posted by SeeChange:
We have had a longer boom time this time, but , the flat down period before this boom was longer than normal , so one could argue that the long boom was a result of the long flat period before hand.
Of course it was actually a very short period in terms of inflation growth…
Between 1977 & 1983 (a period of…[Read more]

Originally posted by Wylie:
Just giving this some more thought, the house we bought in Coorparoo for $156K about seven years ago was valued at $520K last year.
[snip]I have a lot of faith in the seven to ten years calculation.
Rrright… but what you are failing to accept is that at $520k this house is over-valued. What is the PE ratio / rental…[Read more]

How can “The month in review” come out on the 2nd of the month?
Cheers, F.[cowboy2]

It’s getting harder and harder to find reasons to devote such a large proportion of cashflow to PPOR’s.
My PPOR is roughly cashflow neutral. Any capital gains are tax-free as Ausprop pointed out.
Perhaps the question should be “why bother mortgaging a PPOR ever again?” Owning one outright is a fairly safe bet.
Cheers, F.[cowboy2]

Originally posted by mitm:
Also, the house will double in value to $600,000 in 7-10 years, making up for any spending spree.
Of course it will.[blink]
F.[cowboy2]

As property prices keep sliding I would like to consider purchasing another IP with the other $240k that the bank will loan us (after I convince my partner).Upon application for that loan, I’d assume the bank will want to do another valuation on your first property as well as your fiance’s. If they come back short that $240 will no longer be…[Read more]

Thanks, the. [thumbsupanim]
I can’t believe I’d never read that report (only the media commentaries).
Gold.
F.[cowboy2]

I’m one of the believers in house prices doubling every 7 to 10 years.Sure, but you know what else has been doubling at the same time? Consumer prices on everything! Your nominal doubling is supported by inflation and by wage increases.
Taking Melbourne as an example, REIV house prices and ABS inflation stats.
From 1971 through 2004, the average…[Read more]

I thought I’d better add – divide median house price by avewage for a nice graph.
Oh what the hey, here it is:
Sydney…[Read more]