de ja vu, page-184

Treggs

Phil Ruthven from Ibis and others have long advocated leasing (not renting) housing property, rather than owning your home. Ruthven argues that returns are higher in other asset classes over longer time periods: ten+ years.

I'm a fair bit older than you and took Ibis's advice when I moved to Melbourne to work in the early nineties. I leased an inner city appartment for six years and invested the proceeds from the sale of my house into mainly stocks. It certainly worked for me - had I kept the house and lived in it I would have been 40% worse off after CGT and had I bought an inner city appartment rather than leasing it I would have been 85% worse off (inner city appartment prices tanked.)

The question for you today in considering such a strategy is: could you beat a zero percent return over ten years (as you expect steady Adelaide home prices.) You may want to consider some investments in India and China perhaps but I'd suggest your trading ability is such that you could target a 30%+ return from trading even in a protracted bear market. Even fixed rate term deposits would beat a zero percent return on holding your house.

My house will be on the market here in Hervey Bay sometime in 2008!