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When will the Bulls eat humble pie on WA?
Topic Started: 24 Mar 2017, 12:18 AM (19,219 Views)
herbie
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Rufus
31 Mar 2017, 09:23 PM
Life can be strange.
Ain't that tha truth - Oh well, we struggles on ... :)
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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eloi75
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Rufus
30 Mar 2017, 10:58 AM
Maybe, or you might be completely wrong.

I would need to visit Perth and see who really is buying in the suburbs, but my guess is they are small mum and dad investors who are more savvy than you think.
As long as they have the cash flow to hang on and cover any period without a tenant they know that they are buying at a discount. The holding costs are tax deductible even if they are positively geared overall. If they are in a well paid job paying 47 cents tax then they get almost half of their holding costs back.

It's a matter of maths and I don't think you have done them.

well lets do the maths then.

Any expenses incurred go towards your income. So say you earn 120k a year (tax bracket of 37%) and your investment is costing you 20k a year, then you can use that 20k to lower your income which will reduce it to 100k. So now your only taxed on 100k and not 120k. So 37% of 20k is around 7.5k. That leaves another 12.5k that will come out of your pocket and you wont get back. Now add 2 or more houses to that and its looking pretty bleak. So investments are good for lowering your tax but unless you can lower it to 18k (tax free) then your always going to lose money unless your working on capital gains.

Now add to that the property value going down and your now losing the amount plus property value.

Now please enlighten me on how its good to invest when market is dead.
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ozz
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eloi75
31 Mar 2017, 11:41 PM
well lets do the maths then.

Any expenses incurred go towards your income. So say you earn 120k a year (tax bracket of 37%) and your investment is costing you 20k a year, then you can use that 20k to lower your income which will reduce it to 100k. So now your only taxed on 100k and not 120k. So 37% of 20k is around 7.5k. That leaves another 12.5k that will come out of your pocket and you wont get back. Now add 2 or more houses to that and its looking pretty bleak. So investments are good for lowering your tax but unless you can lower it to 18k (tax free) then your always going to lose money unless your working on capital gains.

Now add to that the property value going down and your now losing the amount plus property value.

Now please enlighten me on how its good to invest when market is dead.
Bloody good response and entirely correct.
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herbie
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eloi75
31 Mar 2017, 11:41 PM
Now please enlighten me on how its good to invest when market is dead.
There's two parts ta that question maybe? :

Part 1: "Is it good to 'invest'?" - Answer: "Generally speaking Yes - IMO."

Part 2: "How about when a market is 'dead'?" - Answer: "Well, over tha yrs I've bought in hot markets and in not so hot markets; 'N I surely do know which one I reckon I've got tha best long term 'value for money' from investing in."

'N PS: That's just a comment in general 'n nuthin' ta do wif Perth/WA in particular at this time; Wif them bein' markets I just don't especially follow at all anyways.
Edited by herbie, 1 Apr 2017, 08:45 AM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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eloi75
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herbie
1 Apr 2017, 08:18 AM
There's two parts ta that question maybe? :

Part 1: "Is it good to 'invest'?" - Answer: "Generally speaking Yes - IMO."

Part 2: "How about when a market is 'dead'?" - Answer: "Well, over tha yrs I've bought in hot markets and in not so hot markets; 'N I surely do know which one I reckon I've got tha best long term 'value for money' from investing in."

'N PS: That's just a comment in general 'n nuthin' ta do wif Perth/WA in particular at this time; Wif them bein' markets I just don't especially follow at all anyways.
well lets say you fork out 12.5 a year to keep your investment property in a dead market that lasts 10 years from the price you bought it to the same price 10 years later. You have now spent 125k on your property with no returns. This is just 1 property. imagine 2 or 3 properties. I dont see how that is good investment. Your better off in shares or even term deposits. At least you lose nothing. The only thing is you pay extra tax but at least you have made profit.

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deluded
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eloi75
1 Apr 2017, 01:42 PM
well lets say you fork out 12.5 a year to keep your investment property in a dead market that lasts 10 years from the price you bought it to the same price 10 years later. You have now spent 125k on your property with no returns. This is just 1 property. imagine 2 or 3 properties. I dont see how that is good investment. Your better off in shares or even term deposits. At least you lose nothing. The only thing is you pay extra tax but at least you have made profit.
But you're missing Rufus' point: you can't wait for the upturn in the index or you'll miss out. So you'd better buy now.
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eloi75
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deluded
1 Apr 2017, 02:01 PM
But you're missing Rufus' point: you can't wait for the upturn in the index or you'll miss out. So you'd better buy now.
or u can be a real investor and not a gambler, and wait for the macro stats to start to show reasons for the market to turn and then look to invest. At the moment theres a lot of gamblers ( casino is full of investors ) in the market with no real idea of what they are doing and only hoping for luck or just following the crowd.

perth has a long wayyyyy to go before it hits the bottom. You would have to see major upwards economic movement in china before you would start to see any real movement in perth. The major problem for perth is that china has implemented a new strategy on buying resources. They have build huge storage areas for resources where they can store years worth of resources. They will go years without buying any major resource amounts an this brings down the prices of all resources. When their storage areas reach a certain level then they will start to buy again to refill those storage areas. At this stage the prices are low so they buy bulk. Within a few months they will have acomplished their refill without raising the spot prices on most resources.

So this spells doom for WA as a whole. It means their wont be any real booom periods. Only a few months of the year from time to time.

So perth and darwin are in for a long recession.
deluded
1 Apr 2017, 02:01 PM
But you're missing Rufus' point: you can't wait for the upturn in the index or you'll miss out. So you'd better buy now.
or u can be a real investor and not a gambler, and wait for the macro stats to start to show reasons for the market to turn and then look to invest. At the moment theres a lot of gamblers ( casino is full of investors ) in the market with no real idea of what they are doing and only hoping for luck or just following the crowd.

perth has a long wayyyyy to go before it hits the bottom. You would have to see major upwards economic movement in china before you would start to see any real movement in perth. The major problem for perth is that china has implemented a new strategy on buying resources. They have build huge storage areas for resources where they can store years worth of resources. They will go years without buying any major resource amounts an this brings down the prices of all resources. When their storage areas reach a certain level then they will start to buy again to refill those storage areas. At this stage the prices are low so they buy bulk. Within a few months they will have acomplished their refill without raising the spot prices on most resources.

So this spells doom for WA as a whole. It means their wont be any real booom periods. Only a few months of the year from time to time.

So perth and darwin are in for a long recession.
deluded
1 Apr 2017, 02:01 PM
But you're missing Rufus' point: you can't wait for the upturn in the index or you'll miss out. So you'd better buy now.
or u can be a real investor and not a gambler, and wait for the macro stats to start to show reasons for the market to turn and then look to invest. At the moment theres a lot of gamblers ( casino is full of investors ) in the market with no real idea of what they are doing and only hoping for luck or just following the crowd.

perth has a long wayyyyy to go before it hits the bottom. You would have to see major upwards economic movement in china before you would start to see any real movement in perth. The major problem for perth is that china has implemented a new strategy on buying resources. They have build huge storage areas for resources where they can store years worth of resources. They will go years without buying any major resource amounts an this brings down the prices of all resources. When their storage areas reach a certain level then they will start to buy again to refill those storage areas. At this stage the prices are low so they buy bulk. Within a few months they will have acomplished their refill without raising the spot prices on most resources.

So this spells doom for WA as a whole. It means their wont be any real booom periods. Only a few months of the year from time to time.

So perth and darwin are in for a long recession.
deluded
1 Apr 2017, 02:01 PM
But you're missing Rufus' point: you can't wait for the upturn in the index or you'll miss out. So you'd better buy now.
or u can be a real investor and not a gambler, and wait for the macro stats to start to show reasons for the market to turn and then look to invest. At the moment theres a lot of gamblers ( casino is full of investors ) in the market with no real idea of what they are doing and only hoping for luck or just following the crowd.

perth has a long wayyyyy to go before it hits the bottom. You would have to see major upwards economic movement in china before you would start to see any real movement in perth. The major problem for perth is that china has implemented a new strategy on buying resources. They have build huge storage areas for resources where they can store years worth of resources. They will go years without buying any major resource amounts an this brings down the prices of all resources. When their storage areas reach a certain level then they will start to buy again to refill those storage areas. At this stage the prices are low so they buy bulk. Within a few months they will have acomplished their refill without raising the spot prices on most resources.

So this spells doom for WA as a whole. It means their wont be any real booom periods. Only a few months of the year from time to time.

So perth and darwin are in for a long recession.
Edited by eloi75, 1 Apr 2017, 02:23 PM.
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newjez
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herbie
31 Mar 2017, 08:29 PM
I went inta tha GFC expectin' it ta be bad - 'N battened down tha hatches 'n said "If I can contain me nominal losses ta 20%, that'll be OK". ('N I'm not even in Perth - Where I just maybe mighta thought it coulda become a REAL shitstorm - If I'd bin thinkin' about it; But given I ain't in Perth I weren't ... :) )

So yep, it truly does have me bumfuzzled that Perth bears could be wantin' ta claim 'victory' wif tha nominal price drops havin' apparently bin as genuinely low as they has bin ta date?

Hmmm - Flesh wound at worst type stuff for mine ...
Even UK prices only fell 15% in the GFC. But that doesn't mean people only got a 15% discount. I saw property go for over 30% less than it's previous. I imagine Perth is the same. I'm guessing there are property that can be had at a 15% discount to previous if you look carefully. Thing is, interest rates aren't coming down no more. With Sydney and Melbourne going ballistic, there ain't going to be no GFC type government assistance. Perth will stay low and continue to rot until there are reasons why it won't. Nothing on the horizon yet.
eloi75
1 Apr 2017, 02:21 PM
or u can be a real investor and not a gambler, and wait for the macro stats to start to show reasons for the market to turn and then look to invest. At the moment theres a lot of gamblers ( casino is full of investors ) in the market with no real idea of what they are doing and only hoping for luck or just following the crowd.

perth has a long wayyyyy to go before it hits the bottom. You would have to see major upwards economic movement in china before you would start to see any real movement in perth. The major problem for perth is that china has implemented a new strategy on buying resources. They have build huge storage areas for resources where they can store years worth of resources. They will go years without buying any major resource amounts an this brings down the prices of all resources. When their storage areas reach a certain level then they will start to buy again to refill those storage areas. At this stage the prices are low so they buy bulk. Within a few months they will have acomplished their refill without raising the spot prices on most resources.

So this spells doom for WA as a whole. It means their wont be any real booom periods. Only a few months of the year from time to time.

So perth and darwin are in for a long recession.

or u can be a real investor and not a gambler, and wait for the macro stats to start to show reasons for the market to turn and then look to invest. At the moment theres a lot of gamblers ( casino is full of investors ) in the market with no real idea of what they are doing and only hoping for luck or just following the crowd.

perth has a long wayyyyy to go before it hits the bottom. You would have to see major upwards economic movement in china before you would start to see any real movement in perth. The major problem for perth is that china has implemented a new strategy on buying resources. They have build huge storage areas for resources where they can store years worth of resources. They will go years without buying any major resource amounts an this brings down the prices of all resources. When their storage areas reach a certain level then they will start to buy again to refill those storage areas. At this stage the prices are low so they buy bulk. Within a few months they will have acomplished their refill without raising the spot prices on most resources.

So this spells doom for WA as a whole. It means their wont be any real booom periods. Only a few months of the year from time to time.

So perth and darwin are in for a long recession.

or u can be a real investor and not a gambler, and wait for the macro stats to start to show reasons for the market to turn and then look to invest. At the moment theres a lot of gamblers ( casino is full of investors ) in the market with no real idea of what they are doing and only hoping for luck or just following the crowd.

perth has a long wayyyyy to go before it hits the bottom. You would have to see major upwards economic movement in china before you would start to see any real movement in perth. The major problem for perth is that china has implemented a new strategy on buying resources. They have build huge storage areas for resources where they can store years worth of resources. They will go years without buying any major resource amounts an this brings down the prices of all resources. When their storage areas reach a certain level then they will start to buy again to refill those storage areas. At this stage the prices are low so they buy bulk. Within a few months they will have acomplished their refill without raising the spot prices on most resources.

So this spells doom for WA as a whole. It means their wont be any real booom periods. Only a few months of the year from time to time.

So perth and darwin are in for a long recession.

or u can be a real investor and not a gambler, and wait for the macro stats to start to show reasons for the market to turn and then look to invest. At the moment theres a lot of gamblers ( casino is full of investors ) in the market with no real idea of what they are doing and only hoping for luck or just following the crowd.

perth has a long wayyyyy to go before it hits the bottom. You would have to see major upwards economic movement in china before you would start to see any real movement in perth. The major problem for perth is that china has implemented a new strategy on buying resources. They have build huge storage areas for resources where they can store years worth of resources. They will go years without buying any major resource amounts an this brings down the prices of all resources. When their storage areas reach a certain level then they will start to buy again to refill those storage areas. At this stage the prices are low so they buy bulk. Within a few months they will have acomplished their refill without raising the spot prices on most resources.

So this spells doom for WA as a whole. It means their wont be any real booom periods. Only a few months of the year from time to time.

So perth and darwin are in for a long recession.
Once was enough, but it was a sound sensible post. I haven't seen evidence of increasing storage and would like to see a link, but regardless, much of Chinese infrastructure spending will come to a close late this year, and unless it is replaced, there will be a resultant drop in resource prices.

I tend to agree.

For now.

Things will change at some point. But we are talking years.
Edited by newjez, 1 Apr 2017, 02:45 PM.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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eloi75
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newjez
1 Apr 2017, 02:31 PM
Even UK prices only fell 15% in the GFC. But that doesn't mean people only got a 15% discount. I saw property go for over 30% less than it's previous. I imagine Perth is the same. I'm guessing there are property that can be had at a 15% discount to previous if you look carefully. Thing is, interest rates aren't coming down no more. With Sydney and Melbourne going ballistic, there ain't going to be no GFC type government assistance. Perth will stay low and continue to rot until there are reasons why it won't. Nothing on the horizon yet.

Once was enough, but it was a sound sensible post. I haven't seen evidence of increasing storage and would like to see a link, but regardless, much of Chinese infrastructure spending will come to a close late this year, and unless it is replaced, there will be a resultant drop in resource prices.

I tend to agree.

For now.

Things will change at some point. But we are talking years.
Sorry but my phone is playing up and its reposting same things.

http://www.theaustralian.com.au/business/mining-energy/china-using-weak-prices-to-stockpile-iron-ore/news-story/5df20454bd4e65e90b353576f74cce3f
newjez
1 Apr 2017, 02:31 PM
Even UK prices only fell 15% in the GFC. But that doesn't mean people only got a 15% discount. I saw property go for over 30% less than it's previous. I imagine Perth is the same. I'm guessing there are property that can be had at a 15% discount to previous if you look carefully. Thing is, interest rates aren't coming down no more. With Sydney and Melbourne going ballistic, there ain't going to be no GFC type government assistance. Perth will stay low and continue to rot until there are reasons why it won't. Nothing on the horizon yet.

Once was enough, but it was a sound sensible post. I haven't seen evidence of increasing storage and would like to see a link, but regardless, much of Chinese infrastructure spending will come to a close late this year, and unless it is replaced, there will be a resultant drop in resource prices.

I tend to agree.

For now.

Things will change at some point. But we are talking years.
Here is another link with the storage example.

https://www.google.com.au/amp/mobile.reuters.com/article/amp/idUSKBN1720UO


Its actually pretty clever. That was they never pay for over the top prices
newjez
1 Apr 2017, 02:31 PM
Even UK prices only fell 15% in the GFC. But that doesn't mean people only got a 15% discount. I saw property go for over 30% less than it's previous. I imagine Perth is the same. I'm guessing there are property that can be had at a 15% discount to previous if you look carefully. Thing is, interest rates aren't coming down no more. With Sydney and Melbourne going ballistic, there ain't going to be no GFC type government assistance. Perth will stay low and continue to rot until there are reasons why it won't. Nothing on the horizon yet.

Once was enough, but it was a sound sensible post. I haven't seen evidence of increasing storage and would like to see a link, but regardless, much of Chinese infrastructure spending will come to a close late this year, and unless it is replaced, there will be a resultant drop in resource prices.

I tend to agree.

For now.

Things will change at some point. But we are talking years.
https://www.google.com.au/amp/s/amp.theaustralian.com.au/business/mining-energy/china-set-to-stockpile-coal/news-story/f45c780e9e2a2d28fc432d966769947b
Edited by eloi75, 1 Apr 2017, 03:13 PM.
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Trollie
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You're still missing the point. Indexes lag price changes by months, by the time an index shows the bears it's an up turn its too late.
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