20 year property market

What will the Australian property market look like in 20 years?
Interesting aticle.Thoughts on price increases of 50 / 100% in 20 years ?

 

Very, very likely imo. Isn't that the whole premise under which many of us are investing?

 

By my maths, approx 2% and 3.5% pa growth compounded will get you to 50% and 100% gain respectively in 20 years. I don't think many here would be happy with such paltry growth compared to the last 30/40 years.

 

That's what caught my attention. Wouldn't be happy with those sort of returns.

 

I would be pretty happy with a 2% per annum average growth over 10 to 20yrs period
Infact I would happy with a 1% growth (double over 72yrs) if interest rates stay about the 4% pa
What I would not be happy with is a interest rate rise to over 7% and growth at 1%
Low growth low interest is preferable to high growth high interest rate
The profit margin is fanastic at the moment ....long may it last!

 

It's a silly article for many reasons. We could have an instant 10x increase in prices right away if we made a 10:1 AUD currency split. Discussions about future nominal values that far out are silly.

What the discussion should be on are where and what in Australia are the best things to invest in for real growth (ie growth above the rate of inflation).

 

My strategy is predominantly cash flow and debt reduction. Inflation levels of capital growth works for me.

 

Haven't read the article but given the ABS' median population growth expectation for the next 20 years is an extra ~8m people can't see it being that low. Too many variables to guess so far into the future but still think it looks pretty good for new investors. We'll just have to wait a bit longer/have more patience.

If I can buy a $500k asset and have it double and be paid off in 20 years, I'll be very happy! Hence why I plan on buying at least 5 but with low growth expectations. Anything above 3% will be a welcome bonus although I know most of us won't be relying solely on CG

 

Yes i agree
It does not matter how many years you have been investing CG is always hard to predict ...hence I always try to have "good net margins (high yields relative interest cost) long term sustainable income with long term predictable expenses "

 

Great strategy!

 

CG doesn't pay your Loans off. Unless you sell of course.

Why not buck the trend and switch to P&I while rates are at record lows and let your tenants do some of the hard yards building your Equity. Banks will love you for this too.

 

Yes but my thinking is interest is tax deductible. Therefore its a dilemma. So excess funds goes into offset instead...

 

True. But if we are in for years of slow growth it's another option for low income earners to keep adding to the asset base as tax deductions are lower on the list of priorities.
What do you do with surplus funds when your home is fully offset? Holidays of course.

 

Nah rather inflate away the principle* $500k principle will still be the same $500k in 10 years time but I'd rather pay it then with my inflated $$$'s and rent.

(*the chance of deflation is not factored into this weak strategy)

 

Of course.
Even a weak strategy is still A strategy.

 

But what do you do with the surplus funds pending finding another suitable investment property ?(personal residence was paid off decades ago! I take holidays every month already!)
NO I don't want to adopt you!

 

With posts like that the adoption list is going to get longer. (Please add me).

 

That strategy is for us poor suffering beginners with actual problems

No need for adoption, that's too formal... Just borrow me every weekend! I have every issue of The Beano since it began so I'll let you read them all.

 

This post is Certified "mentor" porn.

 

How many suitcases can you carry? Do you mind travelling in business class or does it have to be in first ?
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