Would you invest in a property over other investments?

[susanscott1980]

Would you invest in a property over other investments?

 

[eatshitndie]

much of my asset appreciation cums from real estate, and it constitutes the largest portion of my entire portfolio which includes stocks, bonds, annuities, mutual funds, cash and properties. opportunities in real estate investment don't cum often, and up and down market cycles take years if not decades. you need cash to strike while the iron is hot (usually after the burst of a bubble) and at the same time maintain patience and holdover duration for a depressed market over years. but when the market heats up again, your asset enhancement will far exceed other portfolio kpi's. it depends on the scale and scope of your property ownership and value relative to other investments. but if you have bought thousands of shares of amazon, apple, google, priceline, and linkedin when they were very low years ago, you would be able to cash them out now and plunk them into properties. almost all tech millionaires in the valley with share options and ipo success cash out quickly and re-invest their new found wealth in real estate.

 

[axe168]

much of my asset appreciation cums from real estate, and it constitutes the largest portion of my entire portfolio which includes stocks, bonds, annuities, mutual funds, cash and properties. opportunities in real estate investment don't cum often, and up and down market cycles take years if not decades. you need cash to strike while the iron is hot (usually after the burst of a bubble) and at the same time maintain patience and holdover duration for a depressed market over years. but when the market heats up again, your asset enhancement will far exceed other portfolio kpi's. it depends on the scale and scope of your property ownership and value relative to other investments. but if you have bought thousands of shares of amazon, apple, google, priceline, and linkedin when they were very low years ago, you would be able to cash them out now and plunk them into properties. almost all tech millionaires in the valley with share options and ipo success cash out quickly and re-invest their new found wealth in real estate.

Deleted.. Repeated post

 

[neddy]

If you are in Australia and received good financial investment advice, you should have a portfolio of properties and offshore funds.

The AUD is devaluing and that is what makes the offshore funds so attractive, with returns of greater than 10% for the past 5 years. In fact, because of the AUD devaluation which has been forewarned many many times, people who take action this year March are looking at 40% returns. The AUD should fall to 85c to USD, so there are still opportunity consider the "brighter" global outlook. Stocks include Coca Cola, Nestle, Danone, etc.

The OZ low interest rate environment will continue and making property investment a positive gearing exercise, the only issue is getting cheap properties on good locations. Building new houses on vacant land is good for lowering stamp duties, depreciation and making costs sense, my Alkimos rentals are generating the kind of returns beyond what I had hoped for, based on the equation formula I left in this forum ages ago. Thanks to the Dummy Guide to Property Investment for that formula.

I am not living there, it is more for Angmos who cannot get enough of the beach lifestyle and has not earned enough to buy their home.
POPULATION PROJECTIONS
In 2006, the total population of Alkimos – Eglinton region was estimated at 25 people. According to the City of Wanneroo,
this is expected to increase to 24,166 by 2021 at an average annual growth rate of 58.13% per annum over 15 years. By 2031, population of the area is expected to be around 57,000.

http://www.alkimosbeach.com.au/~/me...Population Planned Facilities July 2012.ashx
http://www.alkimosbeach.com.au/~/me...each/Documents/EscarpmentVillageBrochure.ashx




Roger Montagamy has a different way of investing and it is part of my portfolio.

My Gold holdings is a bummer but wait, 2014 is coming, tapering is on. Gold is really for the external black swan events because our leaders have done QE to buy time, but not use the time wisely to deleverage. Interest rates rises and price inflation could see gold returning, and financial companies like State Street are worth watching.

 

[axe168]

Would you invest in a property over other investments?

I placed $$$ in several baskets. The best ROI is in properties, probably due to my insights and chicken ventures.
My biggest gain (to date) was 2009 acquisition after GFC - placing 100k with borrowed 800k to purchase a crappy hse in Mel. Now it is sitting at 1.6 to 2mil In avg scenario, considered sold at 1.8 mil, capital gain 900k over the investment of 100k = 900% or ROI of 225%/pa for the last 4yrs

I hv to thank PAP for this.. push factor

 

[Lambo]

If given a chance I would definitely opt for property investment over any other investment…What about you??

 

[The_Hypocrite]

I am thinking of converting my money to usd. CBA has a USD account. But on 2nd thoughts. Whatever i have just use it to pay of my house. So either way i am stuck.

If you are in Australia and received good financial investment advice, you should have a portfolio of properties and offshore funds.

The AUD is devaluing and that is what makes the offshore funds so attractive, with returns of greater than 10% for the past 5 years. In fact, because of the AUD devaluation which has been forewarned many many times, people who take action this year March are looking at 40% returns. The AUD should fall to 85c to USD, so there are still opportunity consider the "brighter" global outlook. Stocks include Coca Cola, Nestle, Danone, etc.

The OZ low interest rate environment will continue and making property investment a positive gearing exercise, the only issue is getting cheap properties on good locations. Building new houses on vacant land is good for lowering stamp duties, depreciation and making costs sense, my Alkimos rentals are generating the kind of returns beyond what I had hoped for, based on the equation formula I left in this forum ages ago. Thanks to the Dummy Guide to Property Investment for that formula.

I am not living there, it is more for Angmos who cannot get enough of the beach lifestyle and has not earned enough to buy their home.
POPULATION PROJECTIONS
In 2006, the total population of Alkimos – Eglinton region was estimated at 25 people. According to the City of Wanneroo,
this is expected to increase to 24,166 by 2021 at an average annual growth rate of 58.13% per annum over 15 years. By 2031, population of the area is expected to be around 57,000.

http://www.alkimosbeach.com.au/~/me...Population Planned Facilities July 2012.ashx
http://www.alkimosbeach.com.au/~/me...each/Documents/EscarpmentVillageBrochure.ashx




Roger Montagamy has a different way of investing and it is part of my portfolio.

My Gold holdings is a bummer but wait, 2014 is coming, tapering is on. Gold is really for the external black swan events because our leaders have done QE to buy time, but not use the time wisely to deleverage. Interest rates rises and price inflation could see gold returning, and financial companies like State Street are worth watching.

 

[neddy]

I am thinking of converting my money to usd. CBA has a USD account. But on 2nd thoughts. Whatever i have just use it to pay of my house. So either way i am stuck.

If your home loan is in AUD and your wages are in AUD, I do not see the problem.

Moreover, paying off the home loan usually make sense than investing the spare cash somewhere.

You spoke about fat cats in Australia, there is no need to get bitter over them. I worked with some of these fat cats before, some are really good at their work. Among those who are not good at what they are doing, some are there because of protection from others, some are pawns in corporate empire building, others form cliques. Whatever it is, I have seen some fat cats fall from grace, sometimes after their protectors left, sometimes it is because others smell a rat because they are smooth talkers/ or are seagulls/ etc. There is even one who thought the organisation owe her a living, and complain about bullying from her boss. End up she was asked to take "voluntary severance" because she is a dud.

At the moment, some fat cats are scratching each other back, but in times of rationalisation - they are cominh, they will also turn to backstabbing each other.

Also, in this English-speaking country. The fat cats are still stuck in Pommy land. Sometimes, I wonder if Australia inherits the worst of the English stock. Their thinking are stuck in England and they can't change.
They hate the fact that I operate at Asian level. I am a threat to them. Sometimes, they will gang up against me because I can be a smart cookie. But, I learn to tone down to blue-eye level.
It can be quite fun. But that is how things work or don't work here in OZ.

You can never be happy if you think you deserve a fairer deal, I just look back what my peers in Singapore, I am feeling lucky already. I am starting a new job in a week's time. I doubt anyone will want to employ me in Singapore at my age. I was unhappy about returning to full-time work, I have been working part-time for the past few years and I loved the arrangement. The fact that I have to work Monday to Friday again is a big sacrifice on my personal time, I only have Sat and Sun left every week, 48 hours only. I am also positively geared. Shit!

 

[The_Hypocrite]

U positive geared ? the tax man loves u....take care and all the best and thanks again for the guidance,,,

If your home loan is in AUD and your wages are in AUD, I do not see the problem.

Moreover, paying off the home loan usually make sense than investing the spare cash somewhere.

You spoke about fat cats in Australia, there is no need to get bitter over them. I worked with some of these fat cats before, some are really good at their work. Among those who are not good at what they are doing, some are there because of protection from others, some are pawns in corporate empire building, others form cliques. Whatever it is, I have seen some fat cats fall from grace, sometimes after their protectors left, sometimes it is because others smell a rat because they are smooth talkers/ or are seagulls/ etc. There is even one who thought the organisation owe her a living, and complain about bullying from her boss. End up she was asked to take "voluntary severance" because she is a dud.

At the moment, some fat cats are scratching each other back, but in times of rationalisation - they are cominh, they will also turn to backstabbing each other.

Also, in this English-speaking country. The fat cats are still stuck in Pommy land. Sometimes, I wonder if Australia inherits the worst of the English stock. Their thinking are stuck in England and they can't change.
They hate the fact that I operate at Asian level. I am a threat to them. Sometimes, they will gang up against me because I can be a smart cookie. But, I learn to tone down to blue-eye level.
It can be quite fun. But that is how things work or don't work here in OZ.

You can never be happy if you think you deserve a fairer deal, I just look back what my peers in Singapore, I am feeling lucky already. I am starting a new job in a week's time. I doubt anyone will want to employ me in Singapore at my age. I was unhappy about returning to full-time work, I have been working part-time for the past few years and I loved the arrangement. The fact that I have to work Monday to Friday again is a big sacrifice on my personal time, I only have Sat and Sun left every week, 48 hours only. I am also positively geared. Shit!

 

[axe168]

If your home loan is in AUD and your wages are in AUD, I do not see the problem.

Moreover, paying off the home loan usually make sense than investing the spare cash somewhere.

You spoke about fat cats in Australia, there is no need to get bitter over them. I worked with some of these fat cats before, some are really good at their work. Among those who are not good at what they are doing, some are there because of protection from others, some are pawns in corporate empire building, others form cliques. Whatever it is, I have seen some fat cats fall from grace, sometimes after their protectors left, sometimes it is because others smell a rat because they are smooth talkers/ or are seagulls/ etc. There is even one who thought the organisation owe her a living, and complain about bullying from her boss. End up she was asked to take "voluntary severance" because she is a dud.

At the moment, some fat cats are scratching each other back, but in times of rationalisation - they are cominh, they will also turn to backstabbing each other.

Also, in this English-speaking country. The fat cats are still stuck in Pommy land. Sometimes, I wonder if Australia inherits the worst of the English stock. Their thinking are stuck in England and they can't change.
They hate the fact that I operate at Asian level. I am a threat to them. Sometimes, they will gang up against me because I can be a smart cookie. But, I learn to tone down to blue-eye level.
It can be quite fun. But that is how things work or don't work here in OZ.!

Great insights ! I am glad I am not alone on this....

 

[neddy]

Great insights ! I am glad I am not alone on this....

I thought it is the end of the road for me and I have to "drive taxi" or go "freelance" like my Singapore peers.
Thankfully it is not.
The job contract also has a allowance for the use of a fleet car for my personal use. So, the car will be competing for parking space at home.
I have to inform the office manager where I will be parking for insurance requirements. Another redtape shit!

 

[axe168]

I thought it is the end of the road for me and I have to "drive taxi" or go "freelance" like my Singapore peers.
Thankfully it is not.
The job contract also has a allowance for the use of a fleet car for my personal use. So, the car will be competing for parking space at home.
I have to inform the office manager where I will be parking for insurance requirements. Another redtape shit!

Good on you ! I am drawing relatively high income. I dont think my job is at any risk at all ! So glad i am in Australia too. Upgraded from Jurong HDB to a bungalow. Freehold.. Yay !

 

[fishbuff]

good to hear that..

did you get your satellite dish up?

 

[axe168]

Bro, these days ppl use TV pad..
How's life in Brisbane ?

 

[fishbuff]

so so.. wish i can join you all in melbourne.

 

[axe168]

so so.. wish i can join you all in melbourne.

Don't just wish lah.. "Walk" ya dreams and you shall achieve...

 

[neddy]

Bro, these days ppl use TV pad..
How's life in Brisbane ?

TVPad quality is disappointing. I was offered a 2-week free trial and I returned the product after that.

Good on you ! I am drawing relatively high income. I dont think my job is at any risk at all ! So glad i am in Australia too. Upgraded from Jurong HDB to a bungalow. Freehold.. Yay !

Good for you.

My new job is more like an Angmo's sidekick. I kind of sense it during the interview. I should have asked for more money.
My previous job PA wear kitten dress to work, a bit too hot for office wear, but she is a bubbly Perth shelia. This time, PA is a 15 stone prima donna.
What is big change.

But it is OK, I can get an extra weekday off every fortnight. So, the arrangement is quite fair, given the economic circumstances "Not falling over yet".

On hindsight.
It is still better to join the public sector than private sector for job security in Perth.
The iron ricebowl is pretty much intact, just that the stupid union wants a 14% pay rise over the next 3 years.
The premier already say no, because WA lost its AAA rating and no extra money. And he is trying to break the rice bowl if the union insist.

 

[good2]

Don't just wish lah.. "Walk" ya dreams and you shall achieve...

I like what you stated!

 

[The_Hypocrite]

[h=1]Unrealised fringe benefits in the housing market[/h]The Drum
By Leith van Onselen
Posted 10 hours 50 minutes ago
Photo: According to an international survey, Australia currently has no housing markets ranked as "Affordable" or "Moderately Unaffordable". (William West: AFP)

All of Australia's markets captured in a recent international survey are ranked as "unaffordable". Are restrictive land use regulations a source of the problem? asks Leith van Onselen.
The 10th Annual Demographia International Housing Affordability Survey has just been released and, once again, it ranks Australia as having one of the most expensive housing markets out of the countries surveyed.
This year's report assesses 360 urban markets in nine countries: Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, United Kingdom, and the United States. The survey employs the "median multiple" (median house price divided by gross annual median household income) to rate housing affordability. This measure is widely used for evaluating urban markets, and has been recommended by, amongst others, the World Bank and the United Nations, and is used by the Harvard University Joint Center on Housing.
The Survey ranks urban housing markets into four categories based on their median multiple, from "Affordable" (3.0 or less) to "Severely Unaffordable" (5.1 & Over). Average multiple data (average house price divided by average household income) is used in Japan, since data for estimating medians is not readily available.
According to the survey, housing affordability deteriorated somewhat in the major metropolitan markets in 2013.
At the national level, Hong Kong has by far the most unaffordable housing, with a median multiple of 14.9. Australia and New Zealand are tied for second most unaffordable market out of the nations surveyed (both 5.5), followed by Singapore (5.1), United Kingdom (4.9), Japan (4.0), Canada (3.9), United States (3.4), and Ireland (2.8).
All of Australia's 39 markets captured in the survey are ranked as either "Seriously Unaffordable"(14) or "Severely Unaffordable" (25). Australia currently has no housing markets ranked as "Affordable" or "Moderately Unaffordable". The result represents a slight improvement on last year's survey, where 30 markets were ranked as "Severely Unaffordable".
Looking at the major metropolitan areas only - i.e., those with more than 1 million inhabitants - Australia ranks as third most expensive after Hong Kong and New Zealand (Auckland).
Overall, Australia has moved down the league tables, registering 5 out of the 20 most expensive housing markets identified in the Survey, versus eight in last year's survey.
The overall decline of housing affordability in Australia over the past few decades (and the modest recent improvements) is clearly evident. Whereas all major Australian markets, except Sydney, had median multiples of three in the early 1980s, today all are ranked at around five or above.
One of the key contentions of the Demographia Survey is that higher land prices are the principal contributor to the rapidly increasing home prices in unaffordable markets, as well as increased speculative activity. These land prices include the cost-increasing influence of land supply restrictions (such as urban growth boundaries), excessive infrastructure fees and other overly strict land-use regulations:

Operating at cross-purposes, many governments have adopted urban containment land regulations (also referred to as "densification", "compact development", "urban consolidation", "growth management", "smart growth", or "livability" policies) that ration land for development... [These policies lead] to materially higher land prices, which makes houses more expensive, just as rationing oil increases the price of petrol...
Regrettably, virtually no government administering urban containment policy effectively monitors housing affordability...
Typically, land use policy authorities fail to compare credible measures of housing affordability with historical standards. Moreover, when faced with the reality that housing costs rise disproportionately relative to incomes, they seek to identify virtually any cause except for the principal cause itself: the destruction of the competitive market for land...
Severely unaffordable markets are also more attractive to buyers seeking extraordinary returns on investment and short term profits. This further raises prices in markets where urban fringe development is largely prohibited by urban containment's land rationing policies. Substantial international investor activity has been reported in London, Vancouver, the US West Coast markets of Vancouver, Seattle, the San Francisco Bay Area, Los Angeles and San Diego and others. These price increases make such metropolitan areas less liveable for average and lower income households.
The key to preserving housing affordability is a "competitive land supply", which appears to be incompatible with urban containment policy both in economic theory and practice. Further, out-of-control house price escalation destabilses economies, retarding metropolitan area economic growth and job creation.
​

And in the 2011 Survey, Demographia noted the following about Australia:

In Australia, 95 per cent of the increase in inflation-adjusted new house (and land) costs were attributable to land, rather than construction from 1993 to 2006. In more restrictively regulated San Diego, house prices were 250 per cent higher than in Dallas-Fort Worth in 2007, yet cost only 15 per cent more to build...
​

Demographia's contention that Australia's rising home prices have been caused primarily by escalating land costs is supported by evidence. Almost all of the growth in Australian housing values (relative to GDP) has been in rising land values.
Further, this escalation of land costs has occurred across Australia's housing markets, as evidenced by all capital city markets experiencing strong growth in vacant land values in the decade to 2012, according to RP Data.
A key reason for this land price escalation in Australia (as well as in New Zealand, the United Kingdom, and the expensive markets of the United States and Canada) is that the market's ability to quickly provide low priced new housing supply is being hampered by restrictive land use regulations, many of which have come into effect since the mid-1990s (Sydney has had long-standing limits on housing development on the urban fringe). Demographia describes the key features and consequences of restrictive housing markets as follows:

Urban containment (More Restrictive Land Use Regulation) relies on intrusive land use regulation, and includes markets where residential development (new construction) is strongly controlled by comprehensive plans or development limits. Generally, it is an urban planning objective to make urban containment the only legal regulatory structure. There is a strong campaign to make the principal alternative, liberal regulation (below), illegal.
Urban containment may also be characterised by terms such as "densification policy", "compact development", "urban consolidation", "growth management" and "smart growth". Generally, urban containment regulation is "plan-driven", as planning departments and governments determine where new housing is allowed to be built. There is a "negative presumption", with new development generally prohibited, except in limited areas where it is permitted by government plans.
By severely limiting or even prohibiting development on the urban fringe, urban containment eliminates the "supply vent" of urban fringe development, by not allowing the supply of housing to keep up with demand, except at prices elevated well above historic norms. In addition to higher housing costs relative to incomes, the higher densities in urban containment markets are associated with greater traffic congestion and longer average work trip journey times.
Urban containment policies are normally accompanied by costly development impact fee regimes that disproportionately charge the cost of the necessary infrastructure for growth on new house buyers. There is particular concern about the cost-increasing impacts of these fees, especially in Australia, Canada (Canadian Mortgage and Housing Corporation), New Zealand (New Zealand Productivity Commission) and California.
​

By contrast, affordable housing markets, like Texas and Georgia in the United States, utilise open market-based land use structures whereby plentiful new housing supply is able to be built quickly and cheaply on the urban fringe, thereby preventing rapid house price escalation. Demographia describes these markets as follows:

Liberal Land Use Policy (Less Restrictive Markets) applies in markets not classified as "urban containment". In these markets, residential development is allowed to occur based upon consumer preferences, subject to reasonable environmental regulation. Generally, liberal land use regulation is "demand-driven". There is a presumption allowing land to be developed, except in limited areas, such as parks and environmentally sensitive areas. By allowing development on the urban fringe, liberal land use regulation allows the "supply vent" to operate, which keeps house prices affordable. Less restrictive regulation can also be called traditional or liberal regulation. In addition to lower costly housing costs relative to incomes, lower population densities in liberal markets are associated with less intense traffic congestion and shorter average work trip journey times.
​

So under an open market-based model (provided there are not also substantial physical barriers to housing supply), increased demand, such as from reduced lending standards and easier availability of credit, quickly leads to the building of additional low priced housing on the urban fringe, which helps keep house prices in check and reduces the likelihood of speculative housing bubbles developing. Further, highly leveraged speculators are less likely to be encouraged into open land markets, since there is little prospect of achieving strong capital gains. Investing in open land markets is, instead, more about rental yield.
I will add that restrictive urban planning structures should not be viewed as a one-way bet for house prices, with unresponsive land supply also more likely to result in higher levels of house price volatility and boom/bust price cycles - a fact also acknowledged by Demographia. Why? Because strict land-use policies (planning) steepens the supply curve, which makes house prices more sensitive to changes in demand, increasing the likelihood of the housing market experiencing boom/bust price cycles as demand rises/falls.

http://www.abc.net.au/news/2014-01-...n-the-housing-market/5208276?section=business

 

[The_Hypocrite]

[h=1]Fitch says Australian homes expensive but crash unlikely[/h]By business reporter Michael Janda
Updated 9 hours 22 minutes ago


A major ratings agency says Australian housing is expensive, but not necessarily over-valued, and that price growth should moderate from last year's levels.
Fitch's global Mortgage and Housing Market Outlook looks at 17 nations, and finds Australia ranks inside the worst four countries on three key measures of housing affordability.
"Relative to rents, house prices in a number of countries are significantly above 1997 levels and also above the long-term average ratio. This is especially the case for Belgium, France, the UK, Australia, and Canada, where the ratio is above 170 per cent of 1997 levels," the report observed.
"At the same time, all of these countries also feature high house price to income/GDP ratios. Therefore, it seems reasonable to assume that, in real terms, the upside potential for home prices is limited over the next decade."

Audio: House prices tipped to rise by 4 per cent this year(The World Today)
While the report shows homes in Australian cities "appear expensive relative to those in other countries in price-to-income terms", Fitch analyst Ben Newey says that does not mean they are "over-valued".
"We don't actually believe it is over-valued, given affordability measures have been within that range for the last decade," he told ABC News Online.
"However, we don't expect house prices to grow at the same rate as they have in the last year."
Australian capital city home prices grew an average of just under 10 per cent in 2013 according to figures by real estate monitors RP Data, with Sydney leading the rise.
Fitch is forecasting price growth of around 4 per cent for Australian housing this year, and similar price rises in 2015, even as interest rates may start rising.

Audio: Australian homes expensive but not necessarily over-valued(ABC News)
Australian home prices appear to have started 2014 with solid gains, with RP Data's daily five-city index showing a rise of around 0.7 per cent so far this year.
The Fitch report expects the rise in real estate prices to continue outstripping wages growth.
"Fitch expects the affordability metric to slightly deteriorate over the next few years as home prices are likely to grow more than income," it concludes.

http://www.abc.net.au/news/2014-01-...e-but-crash-unlikely/5212536?section=business