A message from John McGrath

See rest of article:
What 20 years in property can do

 

great article Alan.

 

Past performance does not predict future performance, imo.

 

When the tide goes out everyone who is narkered can be seen by all and ridiculed so much that they start a class action against their bank.

"Hey look at Datto in the foreshore there. Not as well endowed as he made out lol.

 

Looking on the bright side, how much extra grass will there be to be mowed?

 

Can we repeat the same trend in

• lower interest rates
• increase of debt to GDP
• increase of prices to income

over the next 20 years (as we've seen over the last 20)?

If not, the next 20 years will probably look different.

 

@Propertunity didn't you get the memo mate? Cash Flow props is all the rage nowadays . APRA wont be handing out CG for the next 78 years.

 

Reads like the desperate ramblings of a deluded has been to me.

 

The only thing that matter is does the number stack up at the time that it purchased?
if the number stacked up buy any time whether it today, 20 years ago or 100 years ago or in the next 10 years.

 

Yeah I wish I had a dollar for every time someone said to me, post boom, “that’s the end of CG” because “it’s all going to be different this time”.

 

I agree with you mate. I prefer to take a slightly different approach on that because there are places which look cheap with good yeild but from the supply/demand angle may not look that great .

So i prefer to focus on value. When you can identify real value in a deal and it fits into your strategic investment plan - the trigger is ready to be pulled .

 

Yes that’s true but I have 2 questions for you.
1. If that’s true why do we spend so much time and effort analysing past CG?
2. If something has behaved in a certain way for say the last 100 years, what are the chances that suddenly the behaviour stops or changes completely?

 

The reasons why we will always have cycles (albeit somewhat irregular in appearance at times) is because throughout human history what has, and never will change in the human psyche is

Fear and greed.

 

I am reminded of a quote most likely attributed to writer and philosopher George Santayana, "Those who cannot remember the past are condemned to repeat it."

 

If everyone remembered the past and acted on it, investing will be alot more difficult to do well in . That's the reality of life - the few do well and the majority keep getting herded. Nothing will change .

 

McGrath probably wished he never floated McGraths. Hindsight has remarkable clarity, vision and accuracy with predictions. Someone in Ireland however may still be cursing the property contract they signed 13 years ago.

He is just saying that since the 20 years is a good statistic. If he was in Dublin he wouldnt have said this.

The best time to buy property in Australia was pre-1985 and the earlier the better. If I had $1m back in 1984 I would probably have $10m - $15m of tax free assets. If I had bought $1m of property back in 1930 imagine that ?? I would own a CBD city block. But I couldnt have. I didnt have the $$ and no lender would have done that. My father talks about how when they bought in a suburb in 1970s sydney they could have bought the land next door for $850. Worth $1m today. But who had a spare $850 ?...A new car cost less.

$1m today is nothing like $1m in 1930. John McGrath may be better sticking to selling houses and leave the maths and economics to others.

The best time to buy property is when you can afford it.

 

Now that's funny. Its called the sleep at night factor, still giving it his best shot... Good on him for trying, but I am not buying..

 

From my limited experience, the more people say that this time it WILL be different, the more I find that is the same.

I know a lot of 50 and 60 year olds who are saying they should have bought 20 years ago, 30 years ago, 40 years ago, ... I know because I am one of them .

I am always telling myself:

• to forget the past because you can't change it,
• to focus on the present because you can control it,
• to plan for the future because you can influence it.

I can guarantee that, in 20 years time, there will be a lot of 50 and 60 year old who will be saying "I should have ...".

As I said above, the more people say that this time it WILL be different, the more it is the same .

 

Kierancrates, the property philosopher.

 

No, the property bull-shitter