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House prices to keep falling for years

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kincella said:
spot on...
and after rising 300% or more..who cares if it drops 10%...you are still 290% in front
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Your cred has just gone into negative equity, just like your imaginary multi-million dollar portfolio.

Thanks for the laugh though...keep it up!!!
 

Rather than just point out a mis-understanding with sarcasm and derision, I'll show you the correct calculation.

You buy something for $10 and it appreciates 300%. This makes the asset now worth 3 x $10 = $30. If it then depreciates by 10% (of it's current value = $3), it's now worth $27. That means your original 300% gain has now been reduced to 270%. Still way ahead though regardless!

But of course this also works the other way - if the value went UP by 10% then you would now be at 330% gain from your original purchase price!

Cheers,

Beej
 

Wouldn't a 300% return mean an asset value of $40 in this case? Then a 10% drop would reduce the value to $36.
 
Junior said:
Wouldn't a 300% return mean an asset value of $40 in this case? Then a 10% drop would reduce the value to $36.
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Woops, Junior yes you are correct! so result of a 10% drop would be 260% gain on initial price.

PS: My calcs would be right if we were using a 200% original gain.

Cheers,

Beej
 
Word on one of the property investment forums is that Westpac LMI will now no longer insure any "country" area... so that is at least a 20% deposit required for anything other than the major towns.

I know a few of the investors have been big on the country towns (esp close to mining areas) as it's provided some good yields in past years, but wouldn't surprise me to see them running for the exits soon. Mining down the shaft so to speak, and now going to be very difficult to finance into these areas.

Should be some good bargains for those looking to move out of the rat-race in the next few years however.
 

You mean, like, eco-hermits will be moving back into the ghost towns?

Spooky!

 



Little bit of insight into the mentality of a seasoned hard-nosed property investor here...

Could be a good time to reassess your position on the state of the property market since this mornings awakening...

According to the cycle of market emotions, fear-desperation-panic follow on from the denial stage...

http://www.momentonmoney.com/2008/01/the-cycle-of-ma.html
 
Beej said:
Rather than just point out a mis-understanding with sarcasm and derision, I'll show you the correct calculation.
Click to expand...

Anyone who incessently spruiks the benefits of investing in a particular asset, but cannot understand maths an 11year old could manage, deserves all the derision they get.


Wrong!!

But of course this also works the other way - if the value went UP by 10% then you would now be at 330% gain from your original purchase price!

Cheers,

Beej
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Don't you mean that if some buys now and their portfolio goes down 70% and then up 100%, then you would still be way behind?
 
Beej said:
Woops, Junior yes you are correct! so result of a 10% drop would be 260% gain on initial price.

PS: My calcs would be right if we were using a 200% original gain.

Cheers,

Beej
Click to expand...

Absolutely hilarious, ergo, if you told someone that the capital of N.S.W was Melbourne, you would have been right if you actually said it was the capital of Victoria. Brilliant stuff.

btw: If after a 300% gain your asset goes up another 10%, you would be up 340% not 330%.

On the bright side, you might want to go back and check your real estate gains over the last few years, you might be up more than you think!
 
dhukka said:
On the bright side, you might want to go back and check your real estate gains over the last few years, you might be up more than you think!
Click to expand...

You could well be right!

As for Ubiquitous - at least I tried to point out how something was incorrect rather than take his approach which was just to deride someone for their mistake, and then not even bother to show that he necessarily had any idea either.....

Cheers,

Beej
 
Good news for the property permabulls, less properties being built = increased demand for existing stock and prices/rents through the stratosphere ??



http://www.goldcoast.com.au/article/2009/02/24/52461_gold-coast-top-story.html


Premo time for Gold Coast grannies to get their dunnies fixed, wont cost them a weeks pension just for the call out fee ?
 
You mean those wankers that cut you off? drive utes at 40km/hr over the limit? get pissed during the week while you're trying to sleep? throw cigarette butts and bottles out of moving cars? ...are hard up for work? I feel so sorry for them

And in other news all of Broadbeach, Southport, Labrador and Hope Island is for sale! quick get in fast.. prices going up.

"Motivated Vendor Will Consider All Offers!! "

"We are in too deep..... HELP us out!!The sign is up, the owners are committed and it must sell! "

"Price Reduced, Urgent Sale Required "

"Priced Slashed, Centrally Located Duplex! "

"Reduced by $11,000 to sell straight away"

"SOUTHPORT- REDUCED $25,000 TO $250,000"

"Just Reduced 10k Pefect For First Home Owner "

"Interstate Seller Has Priced This Unit To Sell Quickly!! "

"Investor Quits, Price Slashed, Moving Interstate! "

"OVERSEAS OWNER WANTS IT SOLD. Reduced to $259,000 "

"Urgent Liquidation, This Must Be Sold! "

"OWNER DEMANDS OFFERS!"

.. and I really can't be bothered finding more, this is all in the space of 5 minutes searching
 
Wrong:
You actually said it was the capital of Victoria. Brilliant stuff.
the Capital is about 2 bucks
 
I was going to say it was an alziemers moment this morning....felt quite dizzy and alarmed..at one stage was going to call triple O....took lots of deep breaths and took my asthma medication........
anyway...

I know the difference...but at the time it looked silly saying 300 -10 = 270...cause that looks just as silly..
 

Dont sign up for any more commercial property without your doctor present
 
Thank you Mr. B. I wanted to send it to Robots but was not game.
 
Makes you wonder how the whole World and Uni trained bankers could get sucked into this mess.
 
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