Who was it who used to mention a soggy 'saio' regularly? Was it Pauk?
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(sic) see how that is good investment. Your(sic) 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.
You're assuming that all property is leveraged and all shares are not. Pauk made these basic erroneous assumptions.
If you buy a house for $400k that was once "worth" $500k, you do not now own a $500k property. You have not "made" $100k on purchase.
You simply own a property for which you paid $400k. It may actually now be worth less than $400k as maybe you were the only buyer prepared to pay $400k. Maybe the others were offering $350k or maybe there were no other offers. Further, the fact that you just paid $400k means it is highly unlikely that someone would be prepared to pay 25% more than you did for the same thing. Especially in a declining market.
Your statement "I want to make my money on the purchase. I would be looking for a 20% discount, so I want a $500K property for $400K so I've made $100K on purchase." does not make sense.
If you buy a house for $400k that was once "worth" $500k, you do not now own a $500k property. You have not "made" $100k on purchase.
You simply own a property for which you paid $400k. It may actually now be worth less than $400k as maybe you were the only buyer prepared to pay $400k. Maybe the others were offering $350k or maybe there were no other offers. Further, the fact that you just paid $400k means it is highly unlikely that someone would be prepared to pay 25% more than you did for the same thing. Especially in a declining market.
Your statement "I want to make my money on the purchase. I would be looking for a 20% discount, so I want a $500K property for $400K so I've made $100K on purchase." does not make sense.
+1
Again blinded by his own dogma. You are 100% spot on, he will never grasp that once negative sentiment kicks in the concept that property is wealth will fade fast and be replaced with property is a liability.
Tell people in karatha they are buying a $1.2 mill property for only $350,000. They will laugh at you whilst the vendor sits in the background and cries.
A Chinese business friend of mine I knew from before he made hundreds of millions selling scrap steel to China starting in 2000 told me the reason for much of the sales in IO was that it was part of the money laundering pipeline. Receiving permission to exchange their worthless red paper for dollars allowed them to skim off a high percentage of the dollars once in an overseas branch which they replaced with their Chinese money back home. No one the wiser. It just seems that a portion of the money left and came back. Those skimmed dollars buy housing.
He said the iron ore they DO end up taking delivery of is just piled wherever there's space. Much is used but not all. Since the iron ore has some intrinsic value it's simply listed in the books as an asset offsetting the money spent. Then they use that as collateral to rinse and repeat. Over and over. I suspect the Oz government and big miners know this to be true but Turnballs don't see any downside to his miners or developer mates so why rock the boat?
Who was it who used to mention a soggy 'saio' regularly? Was it Pauk? You're assuming that all property is leveraged and all shares are not. Pauk made these basic erroneous assumptions.
but when it comes to shares, u have no ongoing costs like council rates, water, insurnce, repairs etc etc etc yes you pay interest any loans or cfd's but this is miniml compared to property costs.
Even if property is not leverage, the ongoing costs are higher than any other investment strategy that is not leverage. If shares and property prices increase at the same rate, property would make less profit. The rent collected ($600 a week)on a 1mill dollar property is almost the same as the dividends you get on 1 mil worth of commonwealth shares (paying $1.99 per share on 11200 shares). The biggest difference is the ongoing costs with property
hidflect
2 Apr 2017, 04:12 AM
A Chinese business friend of mine I knew from before he made hundreds of millions selling scrap steel to China starting in 2000 told me the reason for much of the sales in IO was that it was part of the money laundering pipeline. Receiving permission to exchange their worthless red paper for dollars allowed them to skim off a high percentage of the dollars once in an overseas branch which they replaced with their Chinese money back home. No one the wiser. It just seems that a portion of the money left and came back. Those skimmed dollars buy housing.
He said the iron ore they DO end up taking delivery of is just piled wherever there's space. Much is used but not all. Since the iron ore has some intrinsic value it's simply listed in the books as an asset offsetting the money spent. Then they use that as collateral to rinse and repeat. Over and over. I suspect the Oz government and big miners know this to be true but Turnballs don't see any downside to his miners or developer mates so why rock the boat?
does not surprise me.
The chinese are so powerfull these days that if a few hundreds or thousands of their rich get together, they can influence economies or industries. Look at what a few thousand have done to australian and global property markets. When they are not happy they just pull their money out and go elsewhere, leaving a shattered economy behind.
newjez
2 Apr 2017, 03:38 AM
Also strategic if Trump starts a war.
yeah could be a war strategy. But they would need a lot more if they are fighting america and its puppets like france etc. Russia will be the bigggest winner if this happens. They will be the ones selling everything to china. The west cant blockade resources coming from russia
I believe that property prices will rise in perth and everywhere else. But in the short term i believe property prices in perth will decrease. How much i really dont know. For me the biggest fundamental stat will be chinas economy. If china is booming then it means they are buying resources which mean WA will be mining and selling it to them. If that happens then people will be moving back to perth and property prices will start to increase.
If there are a lot of stressed vendors as often claimed then discounts of $100K should be available, and if the median falls a little more then who cares, it will all be restored eventually.
I could be wrong but I don't think buyers from China are a big force in Perth residential property, but they may be buying commercial assets, mines, farming assets etc.
Chris
2 Apr 2017, 04:10 AM
+1
Again blinded by his own dogma. You are 100% spot on, he will never grasp that once negative sentiment kicks in the concept that property is wealth will fade fast and be replaced with property is a liability.
Tell people in karatha they are buying a $1.2 mill property for only $350,000. They will laugh at you whilst the vendor sits in the background and cries.
Property prices in Karratha overshot on the way up, and they overshot on the way down. Prices seem to have found a bottom or close to it.
So would you say that someone who paid (say) $1400 for an ounce of gold when it was once worth $1900, has made $500 on purchase?
A speculator in gold wouldn't I imagine. Tho a true believer in tha 'inherent value' of tha shiny shit come genuine buy 'n hold bullion investor type just might, I also 'spose.
Wif it probably bein' no diff wif property.
In large part at least, it comes back ta whether ya coming at it from tha perspective of a speculator in an asset class, or from tha perspective of a true believer in tha long term inherent value of that asset class just maybes?
'N it's pretty obvious that while we've got genuine investors in property on this site, we's also got plenty of rather more speculative types ...
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