Evidence WHY property prices won't perform as they have in the past

Yes ....

Again spot on . We’re not a pack of Neanderthal ,” buy and hold because the market always goes us and will forgive us our sins “ .

Part of your problem is that you think the market is logical and explainable . It isn’t . Trying to break it down and explain it in terms of , I think the market moved for this reason on that occasion and for this reason of that occasion , those reasons can’t happen again so therefore the market can’t move doesn’t hold water .

Every time the market moves the reasons are slightly different . In share terms it’s the difference between fundamental analysis and technical analysis and if you’ve spent time trying how to work out how to do that , you’ll know how hard that is .

There is no logical fundamental reason why a block of land would go from 1.15 to 2.55 in Sydney between mid 2013 and 2017 , but in one circumstance close to us , in did . From my perspective The driver was human emotion . A whole pile of factors influence human emotion . The factors that influence human emotion change with each cycle , but how we react doesn’t . We’re illogical , emotional beings .

Trump is currently the most powerful person in the world . Does that makes sense ?

My observation is that property is much more predictable and easier to follow .

Cliff

 

That is a load of BS.

Over my 40 years of property investing, I have seen countless people spend say $200,000 adding value, only to find that their property has only increased $150,000 in value. What a great way to increase their net worth.

I came across another case yesterday. I believe reality TV shows has spread the belief that adding value adds to net worth.

People need to understand that property investing is risky and adding value (renovations, developments, splitting, subdivisions, ...) are even more risky.

In 40 years, I have never added value (one exception was a small $50,000 reno). Hopefully, I have another 30+ years on the planet. I have no intention of adding value but I expect my net worth at the end to be a lot higher than it is right now.

For the record, I track my net worth every Quarter and I have been doing so for 15 years.

Totally agree.

In property investment, there are many ways to MAKE money and the same ways can cause one to LOSE money.

The property investment road is littered with road kill but, if one looks up to the finish line, one will see a small (and growing) group of winners/finishers.

To be adamant about “adding value” is terribly ignorant (bordering on stupidity) in my book.

Probably another candidate for “road kill” .

 

Interest rates 3.5% higher than 2019.
Prices 50% higher.

SQUELCH

 

There is always good money to make for the really savvy investor. Unfortunately, the reality is most investors are not really savvy. It's like anything in life. The majority of people will not be at the top. It takes way too much effort and sacrifice in which most people are not interested in.

 

Great advice from the original poster, hopefully no one followed it…

 

Dont have to have a reason for prices to go higher (tho could name a few) to hold. Just cant afford to be out of the market and prices go up.

buy and hope sounds stupid, except it’s worked….. so far.

 

How many did properties did you buy before you were twenty ?

 

2 oh you mean the op my guess is zero and still zero

 

OP might find better company on reddit AusFinance, with the rest of the hacks hoping for a 50% crash, a reminder to buy, followed by property prices to miraculously start rising once they have bought in.

 

When the next boom takes off, I'll once again be having a chuckle at all those who never seem to learn from history and keep an overly negative view of the markets.

The biggest problem I see is many people want certainty before they will invest in a property or really anything.

The only thing certain is if you have no investments and not receiving a large inheritance then get ready to retire on the poverty line after working your entire life. And if you're still renting with no ppor at retirement then.... you're basically ******.

 

If it was easy, everyone (within reason) would be doing it. However, even if it was easy, many wouldn't - other commitments, risk adverse, no spare funds to invest etc. Some of these groups will fall further behind.

 

If one really understood how servicing calculators work AND then add in some structural alterations over time, the answer to this will make a bit more sense.

In 2024, potential baseline assumptions now we’re about to get a 10-30% boost to borrowing amounts AGAIN.

Servicing calcs are on NET incomes too, not gross (so tax changes to incomes play a big role).

There’ll be a time again where a leg up is required to credit again, and governments will do what’s needed, just like over the last 40 years, to get it going again.

The general OP makes sense - why will one achieve capital gain?

1. Credit expands
2. Land becomes scarcer and more productive over time. The demand rises and generally supply doesn’t nearly as much. So the land then becomes more productive to drive supply.

Both these will occur in decades ahead.

What % this achieves though, big ?

In general I do think there’ll be lower growth rates for macros given credit expansion potential is lower than past - BUT I can’t read tea leaves , the assumptions used to change credit will probably change to continue to drive expansion over time.

 

Reality doesnt care about the evidence, and investors (and non investors) dont get rewarded differently based on how good their reasons were.