How much is enough??

[Whimsical]

Gord
Aussie property has gone stupid in the last 10 years.
I made 600% over 8 years on a comercial property and 500% on my house over the same period. The last two years in West Aus have shown returns of up to 40% P.A.
The bubble burst a couple of years ago over east and it has just been reported that 50% of suburbs here actually fell by up to 10% last month.
Perth is now puported to be the most expensive land in the world if taking income levels into account. I find this a little hard to believe.

Mike

[cat man do]

Originally Posted by Whimsical

Gord
Aussie property has gone stupid in the last 10 years.
I made 600% over 8 years on a comercial property and 500% on my house over the same period. The last two years in West Aus have shown returns of up to 40% P.A.
The bubble burst a couple of years ago over east and it has just been reported that 50% of suburbs here actually fell by up to 10% last month.
Perth is now puported to be the most expensive land in the world if taking income levels into account. I find this a little hard to believe.

Mike

Odd, we are hearing in the Eastern states that the W.A bubble has burst or is certainly slowing, and the Eastern states are about to go off again.

Well done though Mike, nice return's. I've never felt that comfortable with commercial, figure everyone need's a house, but not necessarily a shed.

Can't see Brisbane doing anything like 40% but our Rockhampton stock has gone up near 250% over the last 2 years, and is still doing around 30% plus.

Funny thing is when I started building this boat I didn't know how I was going to run it.

Not so much of an issue anymore, and sort of wishing for the 2 x 100 hp option and a cruise of 14 kn and 17 on the fly instead of the 10 kn and 14 on the fly.

10 knot's is fine

Dave

[seafox]

Bloody share market has taken a beating today and now my "enuff" is even less!!

[cat man do]

Originally Posted by seafox

Bloody share market has taken a beating today and now my "enuff" is even less!!

Only if you sell 'em.

I reckon the Chinese market will be back up, just a small correction, but what would I know.

Dave

[44'cruisingcat]

Originally Posted by GordMay

The quickest way to get rich quick is to write a “Get Rich Quick” book, and sell it to poorer people.
The same holds true for gambling – write a “Foolproof System” book.

cat man do...
Please tell me where to buy a house for, say $50,000, and sell it for $300K, or better yet $3 million (6,000% return), in a single lifetime.
I thought I did Ok at about 380% over nearly 20 years. It still didn't amount to a hill of beans.

Sydney Gord. (Ok I'm not sure about the 6000%) In fact almost anywhere on the Australian coast. Sydney real estate has on average, doubled in value every 7 years. At times it goes much faster than this, and obviously slower at others. If you do the research, and time it right you can make good money. Interest and other expenses attracted by rental properties are tax deductable too.

[schoonerdog]

I've got all sorts of stupid spreadsheets as well. For me the plan would be to make sure that my principal is still growing at around 7-8%, drawing down 4-5%, with a goal of 40k per year for a budget (including 1400 monthly mortgage payments). So it comes out to be around 800k with a projected growth of around 12% (conservatively lower than my historical growth rate of 15%). If people are planning on living off their IRA's and retiring early, look into Substantially Equal Payments Plan for early IRA withdraws without penalties.

[Boracay]

Sure, Sydney real estate has done well over the last few years but with rising interest rates and falling prices the party seems to be over.

Real estate here has always been cyclic.

If you buy at the bottom of the bust you may do well (but when theres a bust no one has any money).

If you buy at the peak with a lot of borrowed money watch out...

My old rule of buying real estate was that if I could buy it with my credit card it was time to think seriously about it.

Don't forget with the drought and the boom a lot of people have come to Sydney to make their fortunes.

As it all ends many will go back to the bush.

[44'cruisingcat]

Originally Posted by Chris31415

Sure, Sydney real estate has done well over the last few years but with rising interest rates and falling prices the party seems to be over.

Real estate here has always been cyclic.

If you buy at the bottom of the bust you may do well (but when theres a bust no one has any money).

If you buy at the peak with a lot of borrowed money watch out...

My old rule of buying real estate was that if I could buy it with my credit card it was time to think seriously about it.

Don't forget with the drought and the boom a lot of people have come to Sydney to make their fortunes.

As it all ends many will go back to the bush.

Yes, real estate is cyclic to some extent. But over the last 200 years Sydney real estate has AVERAGED 100% growth every 7 years. If you buy at the top of a boom, you will obviously need to wait longer than that.

Apart from when we had 17% interest rates there hasn't really been what you could seriously call a bust. There has been something of a correction in the past couple of years. But if you have been paying attention, the signs are there that growth is about to start again - currently there is a serious shortage of rental properties, Australia wide, and rents are already rising sharply due to this. This will have 2 effects - investors will start buying again as returns become better, and rising rents will force some renters to look at buying - both will start to drive prices up.

Also, interest rates are fairly static ATM, and are expected to remain that way.

Actually the last boom caused a great many people to move AWAY from the capital cities, INTO the bush. They could sell their house in Sydney or Melbourne and move to a regional centre, buy something far better than they had before, plus maybe one or two investments properties, and have no mortgage whatever. I know this because it's exactly what we did.

PS, you must have a much higher credit card limit than me. Otherwise you won't be buying real estate anytime soon.

[Boracay]

The rise in Sydney real estate depends on where you start and end your graph.

See if you can find someone who brought in the early ninties. Or maybe someone who remembers interest rates at 18.5%. Starting your graph in 1940 could give very good figures.

There has been high inflation in Australia. This has devastated the economy and the Reserve Bank does not look kindly on it, despite prodding from it's political masters.

There is only a shortage of low cost rentals close to the city. Those with serious money should have no trouble finding nice digs.

Remembering my days as a landlord the prevailing wisdom was that as rents went up tennants tended to share accomodation more.

And more recently I seem to remember having great difficulty finding quality tennants.

The Reserve Bank seems to like inflation under 3% so with interest rates closing on 8% and rental returns at under 4% there does seem to be a credibility gap.

[Celestialsailor]

I feel most people that think they will cast off the lines and never look back, never do. What I mean by that is most people cruise between 2 and 7 years with 3 years being closer to the mean. Save enough money for a few years cruising and go. Perhaps rent your house out and when you return, get a small part time job and enjoy semi-rertirement either on your boat or house Ever notice how many boats are for sale with all the cruising equiptment you can imagine? Kind of proves my point.

[44'cruisingcat]

Originally Posted by Chris31415

The rise in Sydney real estate depends on where you start and end your graph.

See if you can find someone who brought in the early ninties. Or maybe someone who remembers interest rates at 18.5%. Starting your graph in 1940 could give very good figures.

There has been high inflation in Australia. This has devastated the economy and the Reserve Bank does not look kindly on it, despite prodding from it's political masters.

There is only a shortage of low cost rentals close to the city. Those with serious money should have no trouble finding nice digs.

Remembering my days as a landlord the prevailing wisdom was that as rents went up tennants tended to share accomodation more.

And more recently I seem to remember having great difficulty finding quality tennants.

The Reserve Bank seems to like inflation under 3% so with interest rates closing on 8% and rental returns at under 4% there does seem to be a credibility gap.

You start your graph when the first fleet landed, you end it today. Sydney real estate has grown 100% every 7 years. It's not rocket science.

I was in the housing market in the early 90's. I chose to wait. However even someone who bought in the early 90's at the worst possible time would certainly have seen good growth by now. (at what most see as the bottom of a correction)

For the last 10 years inflation has been around or less than 3%

As for rental availability, you really seem to have no idea whatsoever. Virtually all over Australia there is a rental shortage. In the mining areas it is well beyond crisis point. In the capital cities, real estate agents are seeing rental "auctions" occurring regularly. We have been advised by our property managers to increase our rents at every lease renewal - the latest increase was 10%.
A property we paid <$160,000 for 3 years ago is earning $320 per week rent. 3 years ago it was earning $220 per week.

Official interest rates are a long way from 8%. More like 6.25. If you shop you can get a mortgage rates of around 7% Rates do not look like rising soon. Rental returns in some areas are well above 5% and are rising.

You can make your own choice about investing in real estate, but don't try to say it doesn't work. I know for a fact it does.

[44'cruisingcat]

Of course if you only buy real estate on a credit card, then high interest rates take on a whole new meaning........

[Boracay]

I've made my share of money from real estate too.

But this boom has gone on for a long time. We are long overdue for a correction.

To my way of seeing things either inflation or interest rates have to go up. The Governor of the Reserve Bank has indicated that he thinks that it is more likely that rates will go up than down.

I just cannot see how we can have a shortage of accomodation after a massive building boom.

There may be money to be made but I would think that extreme care is necessary, and there may be better investements.

[Sailormann]

Are there no "middle class" types that have voted, or is that segement of the population gone?

Uhhhmmm ... a million dollars is not an unusually large amount for a middle class couple to accrue over twenty-five years of working, and I'm not talking lawyers/doctors...I think it's pretty average unless they spent their whole lives in debt...

[GordMay]

According to “CNNMoney”, the Median net worth for 60 year olds, is slightly over $200,000, and slightly over $100,000 for 45 or 50 year olds. The median net worth for those earning $500,000/year is slightly over $800,000.

Net worth comparison by age and income - CNNMoney
Net worth comparison by age and income - CNNMoney

According to the U.S. Census:
Net Worth and Asset Ownership of Households: 1998 and 2000 (USA)
http://www.census.gov/prod/2003pubs/p70-88.pdf