NSW What will have been the 10 best growth suburbs by 2030?

I think most investors have learnt more from one bad purchase than they ever could from 20 good ones. Kudos for sticking through.

 

the RBA has a target of 2.5% and believe they would need to get unemployment for 4% to start hitting this target, we have a couple years to go I think. A few rate cuts may help!

 

Maybe. Very generally, there seems to be a positive correlation between interest rates and inflation. But I'm not saying that it couldn't happen.
What I'm personally hoping for is for them to over-correct and cut the rates and then get into a hyperinflation scenario. That would be great. But do I think it will happen? No.

 

Agreed. Your not the only one, there’s a couple people that are confident this may happen. And it’s not hard to see the story heading that way when we end up using QE if rate cuts don’t work.

If you can afford to hold your assets through the tough times and let inflation erode your debt like the boomers experienced, we will see massive wealth increase but I guess it’s a double edge sword.

 

In my mind it's the areas slightly oustide Perth and mainly to the North.

IMO growth is not "due", and consensus means nuthin

 

We're stuck in a deflation cycle through the improvements in technology. I used to think inflation was just around the corner given QE, etc, but had to admit there's something else going on. The international liquidity spend primarily goes to those who have money, who pump it straight into assets. while the financial savings from technology improvements increase faster then the economy can absorb it with increased activity. I don't think this is likely to change soon, any further easing will create asset inflation rather than market inflation, unless its going into the hands of the spenders.

 

IMO, Townsville will have good growth.
The Adani mine will definitely help lift growth.
As per usual, look for areas with good schools/ university, transport and hospital.

 

That's interesting, I admit I do not know enough about economics and am spending a lot of time researching it. Even educated economists have opposing views and do not agree on many things so a mere mortal like myself has no chance! haha however its cool to learn what I can and form a view based on many different arguments.

Looking at history, it appears cycles of asset prices are fundamentally driven by inflation.
Years where inflation & interest rates ran super high, almost gave previous generations increases in property prices by 20-30% P.A in some cases, then balances out, inflation and growth does its thing before away we go again. Its very difficult to see where the next wave of property growth will come from without this factor increasing.

 

Asset prices can be driven by inflation, productivity, yield, fashion. Just remember additional money is spent, excess money is invested. Inflation is money supply x velocity, above increases in productivity. Qe was increasing supply while lower rates is meant to increase velocity. Ultimately the economy gets to choose velocity though (turnover of money in the economy) and its not choosing increasing rates above productivity at present. Ultimately I think we now get more for less, which is good but looks bad.

Money is the reciprocal of debt, so new money debases existing debt, if anyone will spend it... Assets do go up with inflation, but inflation can target different things, but regardless its a devaluation of both money and debt. Good luck!

 

Thank you for clarifying

 

In that case, Penrith is the best place to invest now since Badgery Creek airport is not yet build.
Soon it will be the 3rd CBD after Parramatta.

 

So Blacktown is not on the card to be third CBD?? Chances for Penrith is quite slim. Perhaps Blacktown might become one day if government started to shift their offices- it is still not happening. Both of them still have their own stigma. Back in 1980s, people said Parramatta had similar stigma as of Blacktown.

 

What does stigma mean here though? Both doubled in the last boom.

 

Mt Druitt more than doubled in the last cycle

Social Stigma ... , not investment worth .

Both are lower middle class / Working areas and CBD's tend to attract higher end workers who may not instinctively want to work in those areas , though Penrth is commutable to the blue mountains .

Cliff

 

Why even discuss this, the City literally has a plan, no need to guess.
A Metropolis of Three Cities | Greater Sydney Commission

 

40 year plan ....

The Capital of Australia was going to be North Arm Cove

Cliff

 

Sorry I thought inflation can devalue money or assets but not debt?
If I owe $1M even if my assets drop, or I earn less and pay for things less, doesn't mean the banks will lower or devalue my debt, is this correct?
Perhaps I don't understand I think of it as deflation rather than devaluation of debt, what is the difference?

 

I found interesting link to population growth say for QLD...
http://www.qgso.qld.gov.au/products/reports/qld-govt-pop-proj-lga/qld-govt-pop-proj-lga-2011-edn.pdf
So for the next 10 years say by 2030-31, I would be somewhat excited (if 6.6M) but if you have the time and can wait till 2056 (for approx. 9.1M) then I would!
Population is just one factor I realize but imagine 6 or 7 M people in QLD in 2031 (similar to MEB or SYD now..), would you invest there now?

See the graph below:

 

What they mean by this is if you borrow $5 today you have a debt of $5 and that buys you bread and milk. If inflation causes bread and milk to cost $8 then you still only owe $5 albeit it’s less valuable now. This also works if I was to sell debt at X repayment. Inflation has devalued the debt as an asset to me because X is now less valuable. All things being equal your income has also increased with inflation and therefore the debt is also worth less to you and is easier to pay back.

 

Ok thanks, yes I understand that, if inflation increases then the debt is devalued, which has occurred in my past 20 years of investing... However, I assumed the overall discussion was about low inflationary environment, and actual deflation as quoted:

"We're stuck in a deflation cycle through the improvements in technology. I used to think inflation was just around the corner given QE, etc, but had to admit there's something else going on. The international liquidity spend primarily goes to those who have money, who pump it straight into assets. while the financial savings from technology improvements increase faster then the economy can absorb it with increased activity. I don't think this is likely to change soon, any further easing will create asset inflation rather than market inflation, unless its going into the hands of the spenders."

So in such deflation situation were inflation is actually lower decreasing, I thought debt would not devalue hence why governments... I thought introduce QE?
So now assume you earn $2K/month and say your debt is 30% so around $600, so you have left $1.4K for bills, payments, expenses for living and maybe left with say $200 for extras out of this, for other lifestyle expenses, movies, saved up holidays, etc...
Now let's say there is deflation, you earn less now say $1.8K/month, BUT your debt is is still the same of around $600 (debt does not decrease because of deflation unlike wages or some products or some bills we pay), so you have now $1.2K (notice you do pay less for these items too) for bills, payments, expenses for living but even though items cost you also lower to purchase now, you are no longer left with any extra $200, you just break even. So deflation I think is very scary for governments as the current debts do not devalue rather inflate I would say...?
That was my understanding, it is important if we are talking increasing or decreasing inflation...just what you presented in reverse.
Hopefully I make sense?