The further back you look the further forward you see

[kincella]

above is a quote from Winston Churchill.....I believe that saying is very appropriate today, and in our current climate.....
apart from spending an awfully large amount of time reading and researching property and events that impact it.......the best quick check device I use is the 10, 20, 100 year charts to show me where property, generally is going in the future.

It sounds simple..but requires some qualifications, in that it depends on the location and even a street, and one needs to hold through the bumps and troughs in the road to come out on top. Unfortunately not everyone will triumph, due to other factors, some outside of their control and some under their control.
I have known some people big in property over the years....one springs to mind...in about 1989 when property had peaked and was heading down again, I asked him what he would do with all his houses and land for sale...he was remarkably quick with his answer....he would take them all off the market, they were no longer for sale...he could afford to hold them for another 10 years....absolutley no way would he sell anything below his pre determed price, which represented xxxxxx amount of profit .

He had several large house and land projects on the go, as well as land for sale......
but then again he was one that was able to purchase former state public school sites from the Vic govt for about 500,000 inner Melb, true value probably closer to $2 - 3 million, so buying land at absolute bargain prices put him ahead in the game.

[Passive]

I'll be the first to admit that I was alittle spooked about the rise of rates and the whole poxy debt alarmist talk. Now that everything ie rates etc are down a lot more relaxed and real estate suddenly very positively geared.

Feel a bit foolish now as its making me dough. What is on the market will be pulled and I suspect a host of non distressed ip holders will do the same.

About the only thing in my investment strategy that has held its own.

[kincella]

I believe I have already seen houses pulled from sale....they were on the realestate site, not recorded as being sold, and not on the site anymore....

you were not the only one spooked by the interest rate rises...we all were...
then just when you thought it was hot in there....down came the rain....or the inflation boogy was suddenly forgotten about....and all hell broke loose,

summits, meetings, conferences,,,,aka panic, panic, panic and voila ! interest rates dropping.....
but psst...its not over yet, not by a long shot....wait for Jan 09 reports on retail to come out...and more job losses......
and more rate cuts IMO
cheers
ps I note ebit joined too

[Passive]

Funny how property has been bashed on other forums - I made a comment on a sharemarket site that to me is stating the bleeding obvious and boy oh boy do they get touchy touchy feely!

Been said many times before that the new gen has not experienced times like this and a lemming mentality has prevailed where any poster with a positive bias is seen as being bereft of good judgment. Then to be fair if we were spooked with our years of experience with the severity of this downturn you can understnd where they are coming from.

I distinctly remember reading an economists report in the 90s that real estate will never go up by 1% pa again -wish I had kept that report. Think Jan Sommers says she keeps copies of negative reports according to the API magazine to remind her that its all happened before. Guess there is always the fears that it is different this time - but it looks like it is more of the same.

My biggest lament is that while all this negative spruiking is going on there are people taking ultimate action to sort out their problems - usually those suffering in business where timing is critical despite ability. Newspapers don't report on this high cost as they did not in the 90s but some see this as the only way out, wish they could see that there is no need for this - I have lost all before and wish there was somewhere these poor folk could get help for the sake of their loved ones. Caryards in Perth taking a battering and I really don't believe there is a need for all of this in Australia , if only the media would let up. Glad to see some good news about the spending binge. Hear what you say about retail figures and hope its not too bad but come what may you are right that rates will come down no matter what and that will help to have things stabilise and improve - I am almost venturing to say we may actually be over the worst - I did predict a spending bonus this Xmas and according to data this may be the case - hope it continues as many Aussies are now p.....d off with the negative headlines and many still are pretty well cashed up.

The ultimate lesson I learnt from the last recession - build your equity through real estate first and foremost and let your business interests be there to support that activity. Last time I focussed on business and it was property that was sacrficed. In Austarlia the interest rate regime of the RBA and the Tax Policy of the Government don't favour busines but do favour Passive investment from real estate -boy have I learnt that the hard way. The ASX is just an extension of business anyway. How can anyone deny the obvious benefits of resi investment and the way it has held up and has escaped the savage downturn for it would have happened by now if it was going to happen imho.

[kincella]

Look I feel sorry for the young ones.....but no one felt sorry for me ..when I was young...but then again I bought property when 21 and had started a family, and all my friends were out partying....but I was stuck in a budget, whitlam was raising interest rates to high heaven...it was no fun at all......

but then again...I have made up for all that was missed..probably 10 fold by now...
and my children will have houses...except they have to wait for them...I sense there are loads of people like myself, and others who are helping the kids now.....its almost a god given right expected by some....which is a phenomonen in itself....only because we are all wealthier nowdays...did not happen to the extent in earlier generations...
oh and the other thing is....almost unique to australia in the past....we prefer to buy our houses....everyone here expects to own their own home...versus Europe where they expect to rent for life.....
I sense a change coming where some will accept the fact they may need to rent for life....then the immigrants attracted to our country are also buying up...never had the opportunity in their homeland...for sure there is pressure out there....
I do try to help the young ones to find ways to own a home...with advice...
but get a little annoyed when it just comes back to the price...
cheers

[Passive]

Read somewhere that FIRB laws are being loosened - yet another stimulus for real estate.

Many more foreigners will buy here because of our homogenous society and stable economy and politics. Could be a double edged sword in the long run as we found out with the Asian crisis! Japanese divesting did not help Qld then.

[kincella]

I thought it was predominately the Japanese that bought up Nth Qld, they were borrowing funds at almost zero rates and buying property here...when the financial climate changed, the Asian tigers took a beating...Hong Kong, Taiwan, Korea and Singapore...the same year Russia defaulted on its debts....it was a climate of fear...but there is something about the Japanese culture that has almost destroyed them....the population is very old currently...and they look to have huge problems caring for the old...and not enough young ones to run the country....I really need to do more reserch here...
they sold and took massive losses when they pulled out of QLd...but again they had set it up in such a way..that their tourists only frequented Japanese owned businesses and tourist sites....no money flowed into Qld, it all went back to Japan....so the locals were glad to see them go...altough it was probably only a year later after the tech wreck...that the rest of australia took off...believe qld was a later arrival on the house boom scene...amd some australians became very wealthy who picked up the bargains left behind by the japanese

[kincella]

passive....divesting of qld did not help some people at that time....but it sure has helped others since then...those able to go in after and pick up the bargains....a huge window of opportunity for some....and then the delay in the boom reaching qld was another window...assuming what I have read is correct...melb and syney would have been the first cities to boom....admit I do not follow qld very much.....
have a sister in Cairns....she was a happy renter all her life....we are like chalk and cheese...then she started calling me capitalist etc...took about 3 years to convince her she too could become a capitalist....she bought a unit for 85,000 and within 2 years was offered 280,000....changed her mind about selling....spends a lot of time treavelling overseas etc....and improving the property....very happy home owner now....but she did take it very seriously, paying off capital to reduce the loan....

I am back to reading Alan Greenspans book ..the age of turbulence....he gives a load of clues as to how a reserve board chairman makes decisions based on the information....he states the most remarkable thing that happened after 911 was ...nothing....what would have meant a crippling shock to the economy was absorbed astonishingly quickly....he covers all the big trigger events from the late 1960's.... and provides plenty of comparisons to the great depression....its a good lesson in the world financial history...

I know he has since apologized for the low interest rates contributing to the boom/bust...however...I believe that apology was not warranted in light of what we all know now...which I class as more fraudulent behaviour..with the bundling of sub prime loans..sold off as triple AAA rated assets...around the world.
cheers

[Passive]

Japanese had developed a number of pretigius golf courss, Joondalup Country Club and The Vines. With the Asian Crisis these were abandoned and some terrific stuff went fairly cheap - Now these terrific courses owned by others
and in the Vines some 1 acre blocks with great houses were cheap relatively speaking.

[2BAD4U]

Look I feel sorry for the young ones.....but no one felt sorry for me ..when I was young...but then again I bought property when 21 and had started a family, and all my friends were out partying....but I was stuck in a budget, whitlam was raising interest rates to high heaven...it was no fun at all......

Too true kincella. I think I posted elsewhere that my first place had no floor coverings, no curtins, etc, but it got me started. Plenty of (young) people starting out now wouldn't be prepared to do that, but will have the brand new car in the driveway and plasma TV in the lounge.

Most of the people who are being alarmist right now would either have never owned a home or be those who are scared of the property market through lack of knowledge. As Passive stated, many would have never experienced this before. I remember in the early 80's in WA property prices doubled and then came back before starting their steady growth again and it is exactly the same this time around (with all the alarmists and chicken little stuff). But the reverse can also be true, plenty of property investors out there at the moment poking fun at those who invested in shares when there are investors out there buying shares at the moment when others are scared.

[kincella]

2bad4u....
the good old days....blankets hung on the windows until we could afford them...did not take too long...important for street appeal etc...
and the old car we bought to assist in the move broke down that first day....we had lived in inner city..walking distance prior to the house purchase...a few things went wrong...but we eventually worked it out...tight budget for quite a while
about the houses....
its not just the profits or income I am interested in....I really love houses...especially the older ones in the inner suburbs...and seeing them transformed into modern day beauties inside..still retaining the beautiful period ..history features on the exterior....I also like interior decorating, garden and landscaping...furnishings....I have only done up 4....and then built a new one but a replica of a calafornia bungalow....but ultra sleek and modern interior....
I dont actually do any of the work like a tradesman.... have plenty of people to do if for me....its the organising etc...and designing part I enjoy....
I treat is as a part time job....because I enjoy it and it earns an income for me....
I intend to spend more time and treat it as my full time job in the future....as I am partly semi retired now....not that old....but tired of my other 'day job'...
its not really a job when you enjoy it so much....
cheers
ps I wish people would spend a bit more time here to make this site a popular site...lots of times I pop over to find I am the only one here...rather dissapointing

[Passive]

Bad time of the year - I am determined to make this site work and will be more popular as the market starts to improve.

Like you this property investing is a passion come hobby. Love this as a pasttime and income earner and when payday comes ain't it a buzz!

Keep posting mate will gather momentum and maybe you will become a very senior poster - sorry that button has been disabled.

By the way your illustration re the house you bought absolutely no mention of actual money you committed or the power of leverage, all the negatives are there to stir you, misspell your name etc. Interesting that the graph of wages to prices ratios are seen to have to revert to the median line and yet the median line has gone up -what they forget it can cause the median line to adjust upwards! Nothing like people who have not had sex telling us it is a meaningless exercise that makes no sense! Got to hand it to them -they know it all hand have never bought real estate -very puzzling!

[kincella]

are you asking me how much I spend ?? min of 60,000 depends on the house anyway, I set a budget...but that can get out of hand a bit..depends on the actual quote...and always a shortage of tradesman....but I do have one that I work with and he tries to keep it within a budget... he does a lot of building and carpentry work, painting...flooring...its the other big ticket items that cost the money...airconditioniong,,,the kitchen is usually the greatest expense...and the flooring...all timber floors...new roof. new garden
then other costs blinds....sometimes when I go over budget I have to wait to save up to finish...like the blinds or something....I dont worry about the cost too much as its not 100,000 per house....its all in the cash book records....I will look at it when I need to....when I sell.....depreciate a lot of things for tax, so some of it comes back to me each year.

drought fixed the expensive lawn in the last house...grass is all dead....and lost a massive japanes maple in the other house.....its value as a mature tree is irreplaceable....huge loss in value on the property too.
cheers

[Passive]

No my point was that when we say we buy a house for 60k it is actually only the deposit and the entry costs that we bought it for- profit therefore multiplied massively thanks to leverage. Houses and inflation seem to cause real estate essentially to tread water until positively geared but its the leverage that has done the trick for me and I am sure for you. All the arguments that show property does not exceed inflation causes the talk of affordability to be meaningless and makes every asset class suffer the same fate. Property in total value is only a hedge against inflation in my experience but its the leverage that has been the real winner.

My point is that whatever asset that can be leveraged SAFELY is the one to get into. Shares and margin calls illustrate the folly of that exercise whereas if real estate drops it is of little consequence unless you sell. Best way to buy shares with borrowings, never really wise , is against collateral of real estate.

I can't believe kids with no life experience will challenge obvious success - does anyone really believe that with property you can suddenly wake up one morning, get the median prices and say - I'll ave dat one fanks!

Property you can use your labour, like you do to fix - try as I may nought I can do to have my SHAREHOLDING GO UP.

[kincella]

absolutely....always leveraged