This guy has a crystal ball on Oz Prop

I would if the Government threw some at me!!!!

I am one of the lucky one who hasn't received a welfare cent due to COVID .

All the Government has done for us is to give us a 50% pay cut (last FY and this FY) when they reduced our mandatory self-funded pension rate from 4% to 2% .

 

I am confused that you're unhappy with 2%?

 

Low stock,
High Owner Occupier demand base.
Extremely low rates .


Another spanner is i feel the 2015 LEP made changes to Dual Occs. Means many site over 600m we are also competing with would be builders.

 

I am talking about institutional investors, and high net worth investors. That said there are a lot of FHB at the moment.

It is important to understand how the arithmetic of lower interest rates impacts asset prices - it is designed to inflate prices. But it makes previously uneconomic projects look viable. If you run a discounted cash flow model of any asset that produces income, the value of that asset has to increase any time the interest rates decrease. Once you lower interest rates and pump the economy full of funny currency, when it translates into higher asset prices is just a question of when, not if.

If you are a high net worth individual and you have savings in a bank account earning 0.5%, you are almost compelled to invest in something else just to maintain your purchasing power. So a piddly 3% yield in real estate suddenly looks pretty good.

I am not saying any of this is good. Quite the contrary.

The spike in the gold prices is telling us that in real terms, asset prices are crashing.

I am just cautioning those who are looking only at nominal prices, and ignoring the value of the currency itself, and expecting asset prices to decline at a time when all of the policy levers are designed to prevent prices from falling.

Last comment: all of these interventions, the lock-down itself in particular, is causing a huge rift between rich and poor. Government interventions always do. The lockdown has widened the gulf between rich and poor, and the response has exacerbated that rift even further. So anyone who complains that free markets cause wealth inequality ought to reflect on this.

 

Didn't you notice the on my previous post?

I know the 2% is only the minimum mandatory amount. One can pay oneself anywhere between 2% and 100% if one wants/needs to.

In fact, I am very happy with the 2% - means more cash/assets stays in our SMSF .

 

Curious, what market do you target in Sydney And who are your buyers in the main Today ? FHB etc?

 

It's hard to answer, because I never really get a blank slate. Customers have their own unique budgets and preferences. Some are owner occupiers and I am just a deal finder. Others are investors. So there isn't really an average. Sufficed to say, middle ring Sydney is doing okay. And where you can you want something other than a generic 1 or 2 bedroom unit. From what I see, it's all about the extra bedroom.

 

Yehhhhhh the Druie Hope you're well mate

 

Thanks. Yeah can’t complain about property prices. And if Clive Palmer sends WA broke I can see a mass exodus from there straight to you know where........The Druitt.

And they can bring the Mint over here as well lol.