Capital Growth. A thing of the past?

Discussion in 'Property Market Economics' started by Sonamic, 27th Jun, 2015.

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  1. Sackie

    Sackie Well-Known Member

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    Great post!
     
  2. HUGH72

    HUGH72 Well-Known Member

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    What we do know is that the result of doing nothing is guaranteed
     
  3. keithj

    keithj Well-Known Member

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    A guy called Wayne Gretzky said it best - you miss 100% of the shots you don't take.

    However, he also said Ninety percent of hockey is mental and the other half is physical.
     
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  4. Big Will

    Big Will Well-Known Member

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    No one knows the future however there are a lot of key signs that it will not take 30 years to double.

    For this to happen population increase has to stop, wages & CPI have to stop and funding needs to stop a whole lot has to stop.

    With population increasing (Demand), wages going up (even at a slow rate means more $$$ to spend) and funding still being accessible (more $$$ to spend) then property prices have to increase as the demand is still there.

    If a nuclear bomb was dropped on Sydney the property prices would crash in a huge way as there was no demand but as long as things are status quo good quality property will continue to rise and double it might be 3 years or 15 years but eventually it will double.

    Parents bought a place in Mansfield (Brisbane) for 125k and it did nothing for 7 years but in the next 7 years it quadrupled (Double and doubled again) now would be worth over 500k more like mid 500s!
     
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  5. Propertunity

    Propertunity Well-Known Member

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    I remember responding to a similar thread on Somersoft many many years ago. If I, or my clients, had taken that advice then, we'd be significantly worse off today.

    It is not "all different this time". It is the same as it has always been. Same ole , same ole. Come back here in 10 year's time and we'll see who was right.
     
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  6. sash

    sash Well-Known Member

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    Yep...people overestimate what can be achieved in 1-2 years....but underestimate what can happen in 10-15 years.

    Short termism...human nature unfortunately.

     
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  7. Beelzebub

    Beelzebub Well-Known Member

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    Yeh but, isn't it these lovely people coming to visit, along with restrictive town planning policy, that makes property make money?
     
  8. Johann_

    Johann_ Well-Known Member

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    Hi,
    I am a believe that the clock for gain or losses in any business, shares or property investment is allot shorter then what it used to be. So much investors and institutions react on news where they are to late eg; buy at the highest point and then when they smell fear they run to the hills.

    Whats a good gain to you?
    I am only a young man but I have bought and sold a few properties because some areas that i bought in where cheap and once the area peaked i just sold.
     
  9. dublin_101

    dublin_101 Active Member

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    I wish it doubled every 10 years...my first home purchased in January 2009 for 370K would only be worth about 500k today...so thats only 35% growth in 6 years...

    I think a LOT of it depends on where you buy and I've just learnt the biggest lesson going forward for me is, if you want capital growth - buy in an area where this isn't an abundance of land and new estates within the area......buy in built up areas surrounded by built up areas....thats my two cents worth.
     
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  10. JDP1

    JDP1 Well-Known Member

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    Correction..I can accurately predict that the maroons will win the next state of origin game.
    You heard it here first. Exclusive and free of charge.
     
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  11. WinDyz.

    WinDyz. Well-Known Member

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    Agree... Buy in established area (close proximity to CBD) where there're lots of good schools, infrastructure,etc. The only downside with this is rental return will be lower.
    Buying in an area where there're massive land to be released will not give you the best gain.
     
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  12. Sonamic

    Sonamic Well-Known Member

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    Only cause it's IN Qld.
     
  13. Big Will

    Big Will Well-Known Member

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    How long would it take you to save 130k?

    Also it isn't a flat line of growth and depends on the stock you own.

    The other part is the first 5 years will have less gains then the next 5 years as it compounds.

    Parents had a property that didn't do any gains at all for 7 years but in the next 7 years it quadrupled.
     
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  14. Perthguy

    Perthguy Well-Known Member

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    I think capital growth is still possible depending on what you buy, where and when. I have two examples:

    Potential development site in Heidelberg Heights purchased for $385,000 in 2007. The price peaked in 2010, eased right back and is now back at 2010 levels. Comparable properties in the area selling for $650,000. I expect comparables to hit $700k by the end of the year.

    Potential develoment site in Cloverdale purchased for $465,000 in 2011. The price peaked late last year and has now eased off. Recent bank valuation of $725,000 shows a strong return. Of course there has been a rezoning, change to government policy to allow apartments on the site and thirteen skips of rubbish between $465,000 and $725,000. Still, it's not like I bought at the start of a cycle and valued at the end of a cycle to get that kind of return. As I said, it depends on what you buy, where and when. In my case I bought a site for development that was flagged to increase from a 2 dwelling site to a 4 dwelling site. In the meantime, it became an apartment site, dramatically increasing the value.
     
  15. JDP1

    JDP1 Well-Known Member

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    I don't want to say 'told you so'...But who am I kidding..I bloody well told you so!!
     
  16. Sashatheman

    Sashatheman Well-Known Member

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    I thought that quote was from Lee Harvey Oswald :p
     
  17. LibGS

    LibGS Well-Known Member

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    According to some people Oswald hit 400% of the shots he didn't take.
     
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