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Ozzie Houses versus Ozzie Shares - MASSIVE WIN FOR HOUSES; Consistently over 10, 15, 20, 25 years
Topic Started: 20 May 2012, 02:50 PM (3,335 Views)
newjez
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Frank Castle
20 May 2012, 05:08 PM
Easy
Split a block off of the existing property and you have increased the value considerably.
Build a house on the "Free" block and you have increased its value considerably again
That's finding and releasing untapped value - you can do that with shares as well - ask Warren.

But the arguement was about investing blind - which makes it more of a nonsence arguement.
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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genX
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jester77
20 May 2012, 05:24 PM
Sounds like houses are doing great and shares aren't. I'm assuming you will be lobbying governments to remove tax concessions and fiscal grants for houses and replacing those with further concessions and fiscal stimulus for shares.

Can't wait for the first shares owners boost.
Just don't spend your FSOG on bank shares, not even the forthcoming grant can save them.
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Strindberg
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Some might think 25 years is not long term enough.

Growth over the last 50 years - 1962 to 2012

House prices +8.4% pa (from $8.48k (Stapledon cap city detached) to ~ $500k) - 60 fold increase

ASX All ords +6.2% pa (from 211.5 to 4300) - 20 fold increase

So houses up 60 fold whilst the ASX Allords rose 20 fold over the last 50 years.

Growth over the last 100 years - 1912 to 2012

House prices +6.4% pa (from $1k (Stapledon cap city detached) to ~$500k) - 500 fold increase

ASX Allords +5.6% pa (from 18.4 to 4300) - 233 fold increase

So houses up 500 fold whilst the ASX Allords rose 233 fold over the last 100 years.



House prices rising is not a new phenomenon.
Edited by Strindberg, 20 May 2012, 07:07 PM.
Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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genX
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Quote:
 
The S&P500 peaked on September 5th 2000 at 1520.

End of the first leveraging.
Quote:
 
The US Case Shiller Index peaked at 206.5 in July 2006

End of the second leveraging.
Quote:
 
So it's not really true that US shares have recovered. Since the secular bull trend broke in 2000, it has been a long-term bear market.

Good thing those terrorists took down some buildings in 2001 then, otherwise people might have noticed. Nothing like a good war to distract people from what is really going on.
Quote:
 
A properly-balanced portfolio has to hold both. I don't think it makes a lot of sense to try to pit them against each other, since a portfolio that holds both outperforms either by a good stretch in terms of balance between volatility, liquidity and return.

As long as you don't have a de-leveraging recession, that will hold true for a long period. The last de-leveraging recession was 80 years ago and was only brought to a close by a massive and extremely profitable war. Will we have a de-leveraging recession? It's looking increasingly likely, but we may muddle through. Listen for the beats of the war drums.

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Strindberg
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jester77
20 May 2012, 05:24 PM
Sounds like houses are doing great and shares aren't. I'm assuming you will be lobbying governments to remove tax concessions and fiscal grants for houses and replacing those with further concessions and fiscal stimulus for shares.

Can't wait for the first shares owners boost.
Houses and land are taxed far far more than shares.

Stamp duty, council rates, development fees, GST, registration fees etc etc. If I was interested in lobbying (I'm not) I would lobby to have stamp duty, GST and development fees abolished and to have rates born by the occupier. Why should some people pay to have other peoples rubbish removed?

Property taxes are many times the grants.
Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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stinkbug
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The comparison stands, but for real world investors it's not particularly relevant. I don't buy every share, I don't buy every property - I get to cherry pick. And over time you get better at picking assets.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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BubbleBoy
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Strindberg
20 May 2012, 02:50 PM


Dividends and rent could also be included. I'd expect that to make little difference to the message.
I haven't done the sums - but I suspect it would close the gap *to some extent*.

Especially when you include imputation credits to the shares and minus the costs of ownership (rates, land tax, repairs, etc) for housing.
My name is based on a Seinfeld character, not on a belief of a housing bubble.
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jester77
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Strindberg
20 May 2012, 07:04 PM
Houses and land are taxed far far more than shares.

Stamp duty, council rates, development fees, GST, registration fees etc etc. If I was interested in lobbying (I'm not) I would lobby to have stamp duty, GST and development fees abolished and to have rates born by the occupier. Why should some people pay to have other peoples rubbish removed?

Property taxes are many times the grants.
Yet according to you, are still outperforming shares regardless, so my point still remains.
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Aussiehouseprices
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Strindberg
20 May 2012, 02:50 PM
House prices have massively outperformed the ASX all ords over all 4 periods.
Thinking logically, I cannot understand how property can outperform shares over the long term. Shares represent businesses that employ people to create/add value. Property, once build, just sits there (and deteriorates).

Why would entrepreneurs waste their blood, sweat and tears on starting and running business when they could just buy a few houses and relax - and make even more money?

Property is less volatile than shares. Bubbles aside, the risk is lower and so too should be the reward.

I wonder if the comparison of house prices to share prices is misleading. If I buy a house for $1 million, spend $500,000 on renovations, and sell it for $1.5 million, the value has gone up by 50%.

If I buy a $1 share in a business that is worth $1 million and the company spends $500,000 on expansions, the share price would theoretically still be worth $1.
Edited by Aussiehouseprices, 20 May 2012, 09:59 PM.
Aussie House Prices blog
Latest post: Real Estate 101 - Lecture 1: Never use the "F" word
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Strindberg
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BubbleBoy
20 May 2012, 07:10 PM
I haven't done the sums - but I suspect it would close the gap *to some extent*.

Especially when you include imputation credits to the shares and minus the costs of ownership (rates, land tax, repairs, etc) for housing.
On reflection, I agree with you. XAO dividend yields are similar to rental yields but the indecent taxes and charges on property would close the gap, perhaps completely.
Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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