keep the thread guys !
we HAVE talked about it long time ago and we keep coming back to it occasionaly, manly to prove that real estate is not the 'alpha and omega of all investment' like more 'elementary' amongs the investors would have you believe...
the problem is mostly that, they don't understand the full extent of inflation and mistakenly include lots of it in a cathegory of 'capital gains'...
...there was a doubling of prices of property in the mid eighties towards late eighties and than a 'great recession we had to have' which brought double digit interest (and when we say double digit we mean 17 -19 % in some instances...not just your 11% double digit)...
problem with recollecting these events is that (much like with last boom) it happens at different times in diff locations.
that's why you'll probably get a reply that what i'm writing is not true 'cose 'someone' clearly remembers that ... bla bla bla...and it was not untill keating ... bla bla bla...
i'm talking sydney chronology...
funny thing is:
1)even though only 4-6 years before property has doubled in price on everyone...and then...
2)we entered a period of "previously unheard off" high interest rates...
...(people that were trapped in the mortgages will vouch for it)
loans were EASIER TO SEVICE...
...due to lower price to wage ratio, repayments STILL represented smaller portion of household income THAN TODAY !!!
...price of property did drop but not dramatically (nobody was calling 40 % drops then but 20% wasn't unheard of...although it wasn't the norm...)
if you go back and sniff out previous posts (from year ago or more) boys have done full calculations of 'real life' examples (i think one example was kincella's house that he bought in the sixties...eighteen sixties mind you!) concerning inflation !
it really is an eye opener !!!
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