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20 year property market

Discussion in 'General Property Chat' started by Now or never, 3rd Jul, 2016.

  1. Now or never

    Now or never Active Member

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  2. Bran

    Bran Well-Known Member

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    Very, very likely imo. Isn't that the whole premise under which many of us are investing?
     
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  3. HomePage

    HomePage Well-Known Member

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    By my maths, approx 2% and 3.5% pa growth compounded will get you to 50% and 100% gain respectively in 20 years. I don't think many here would be happy with such paltry growth compared to the last 30/40 years.
     
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  4. Now or never

    Now or never Active Member

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    That's what caught my attention. Wouldn't be happy with those sort of returns.
     
  5. Beano

    Beano Well-Known Member

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    I would be pretty happy with a 2% per annum average growth over 10 to 20yrs period
    Infact I would happy with a 1% growth (double over 72yrs) if interest rates stay about the 4% pa
    What I would not be happy with is a interest rate rise to over 7% and growth at 1%
    Low growth low interest is preferable to high growth high interest rate
    The profit margin is fanastic at the moment ....long may it last!
     
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  6. big max

    big max Well-Known Member

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    It's a silly article for many reasons. We could have an instant 10x increase in prices right away if we made a 10:1 AUD currency split. Discussions about future nominal values that far out are silly.

    What the discussion should be on are where and what in Australia are the best things to invest in for real growth (ie growth above the rate of inflation).
     
    Last edited: 3rd Jul, 2016
  7. LibGS

    LibGS Well-Known Member

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    My strategy is predominantly cash flow and debt reduction. Inflation levels of capital growth works for me.
     
  8. House

    House Well-Known Member Premium Member

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    Haven't read the article but given the ABS' median population growth expectation for the next 20 years is an extra ~8m people can't see it being that low. Too many variables to guess so far into the future but still think it looks pretty good for new investors. We'll just have to wait a bit longer/have more patience.

    If I can buy a $500k asset and have it double and be paid off in 20 years, I'll be very happy! Hence why I plan on buying at least 5 but with low growth expectations. Anything above 3% will be a welcome bonus although I know most of us won't be relying solely on CG ;)
     
  9. Beano

    Beano Well-Known Member

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    Yes i agree
    It does not matter how many years you have been investing CG is always hard to predict ...hence I always try to have "good net margins (high yields relative interest cost) long term sustainable income with long term predictable expenses "
     
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  10. Beano

    Beano Well-Known Member

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    Great strategy!
     
  11. Sonamic

    Sonamic Well-Known Member

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    CG doesn't pay your Loans off. Unless you sell of course. :p

    Why not buck the trend and switch to P&I while rates are at record lows and let your tenants do some of the hard yards building your Equity. Banks will love you for this too.
     
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  12. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Yes but my thinking is interest is tax deductible. Therefore its a dilemma. So excess funds goes into offset instead...
     
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  13. Sonamic

    Sonamic Well-Known Member

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    True. But if we are in for years of slow growth it's another option for low income earners to keep adding to the asset base as tax deductions are lower on the list of priorities.
    What do you do with surplus funds when your home is fully offset? Holidays of course. :D
     
  14. House

    House Well-Known Member Premium Member

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    Nah rather inflate away the principle* ;) $500k principle will still be the same $500k in 10 years time but I'd rather pay it then with my inflated $$$'s and rent.

    (*the chance of deflation is not factored into this weak strategy)
     
  15. Sonamic

    Sonamic Well-Known Member

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    Of course. :D
    Even a weak strategy is still A strategy. ;)
     
  16. Beano

    Beano Well-Known Member

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    But what do you do with the surplus funds pending finding another suitable investment property ?(personal residence was paid off decades ago! I take holidays every month already!)
    NO I don't want to adopt you!
     
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  17. Cactus

    Cactus Well-Known Member

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    With posts like that the adoption list is going to get longer. (Please add me).
     
  18. House

    House Well-Known Member Premium Member

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    That strategy is for us poor suffering beginners with actual problems :p

    No need for adoption, that's too formal... Just borrow me every weekend! I have every issue of The Beano since it began so I'll let you read them all.
     
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  19. Sonamic

    Sonamic Well-Known Member

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    This post is Certified "mentor" porn. :p
     
  20. Beano

    Beano Well-Known Member

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    How many suitcases can you carry? Do you mind travelling in business class or does it have to be in first ?
     
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