I was listening to Paul Clitheroe last night and he believes that the property market bubble (as an investment tool) is about to burst and people should be looking to shares. He acknowledged that this of course would cycle over the years but property values will take a hit.
Interested in comments from others on this.
If the property bubble bursts, wouldnt that only effect Capital Gains on your investment.
It shouldnt affect passive income from tenants. Im more interested in creating a portfolio of tenanted properties giving me passive income for life, if the property is worth selling at a later date for a large CG then I may sell to roll the profits back into another investment.
Thats my 2cents + 7% interest worth…[
]Regards,
Arty.[
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“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)I think that there will eventually be a flattening of prices in property. Long term price charts show that property is an ebb and flow area.
Regional areas will probably be more affected by this. As an example, my home town had flat prices for 10 years, buy a house for 80k, sell it 10 years later for 82k. In the past 12 months, every property we have there has at least doubled in value – one more than doubled in the last four months.
When the plateau strikes it will be great for investing, as many people will move back into shares and managed funds. Then after a few years things may take off again when the people who moved to shares start seeing some value in property.
Lead the lemmings – don’t follow!
“Lemmings” !! I loved that game.
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Regards,
Arty.[
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“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)There has been heaps of discussion about the bubble bursting.
All those predicting it,(including me) will be right…..one of these days. Even a broken clock is correct twice a day![
]What makes me think that it won’t happen just yet, is the fact that all the financial comentators are preaching a fall in property prices.
Standard contrarian theory says that we have to wait till they have given up and all turned positive, or at least stop preaching…….THEN we will get our property crash.
Clitheroe has always been biased towards shares, and you would fully expect him to be bearish on property. He was preaching shares, shares, shares, and bagging property 2 or 3 years ago.
What has happened since then? Property has absolutly flown and share investors(but not traders[
]) have been slaughterd.Cheers
WayneArty
Well if the stimulus for the bursting of this bubble is a slowing of economic activity fuelled by a downturn in global economic activity or an increase in interest rates (later more likely) then this will probably have a flow-on effect to things like general domestic business activity and expansion as well as employment levels which could result in higher vacancy rates (read Steve’s new free chapter!), slower finding tenants, more defaults on rents, lower rent growth etc. This along with higher interest costs is not good news for investors. The double-whammy is poor capital growth as well!Arty
Well if the stimulus for the bursting of this bubble is a slowing of economic activity fuelled by a downturn in global economic activity or an increase in interest rates (later more likely) then this will probably have a flow-on effect to things like general domestic business activity and expansion as well as employment levels which could result in higher vacancy rates (read Steve’s new free chapter!), slower finding tenants, more defaults on rents, lower rent growth etc. This along with higher interest costs is not good news for investors. The double-whammy is poor capital growth as well!hi all,
well im hopeing the bubble will burst as im not about to sell my own house but i am looking at getting into a investment property so for me a downturn in prices will be welcomed assuming it dosnt take to long to cycle back
HousesOnly.. I havent read the new chapter as yet.. I can now see where your coming from though. That was a good post.
If housing prices go up, then wouldnt there be more people willing to rent until property prices come down though ? [
]Regards,
Arty.[
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“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)
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