I am selling my investment property right now as I feel we have reached the cusp . Yep another rate cut may see the market up by at least 5% and 15% would indeed be a bubble at this stage.
Quality housing will always be that , watching the ups and downs of market prices is irrational to me and is only of a concern when selling.( and buying )
I will face a massive cgt bill as the property has 4 1/2 itself but even so if I rented and taking into consideration rates and taxes etc , even though paid off ,the return is only about 3.15% less income tax 2.2%...on the original purchase price its about
12.5% and about 8.75% after tax....
I look at the money value of the property upon selling even after adjusting for the cgt and selling costs I can achieve better results elsewhere with the resultant sum than 2.2% after tax .
As far as deflation is concerned we are not technically there but realistically we are , poor retail sales and continued specials are the key for me....apart from bunnings where folk are renovating instead of selling etc
Whatever your property is worth now , in the space of 10 years if all goes averagely well it will probably double in price in quality areas ....inflation will be the driver ...
Rate cuts means the economy is sour , the RBA has only housing as its saviour but IF the goverments of the USA Japan
and the Euozone have their way and inflate their problems away , we are in for hyperinflation...housing may explode but when interest rates have to rise , the result will be a massive implosion....
Anyways....there is better value elsewhere than housing ....
