Hi HenryHe may or may not be right ... but you're not seriously...

Hi Henry

He may or may not be right ... but you're not seriously making your investment decision based upon what a mortgage broker tells you ?


According to Bouris, property investing is a “cycle game”.

“You need to get in while the rates are coming down and make sure you are not paying the top price.

He's right there - unless you can create a capital gain by sub-dividing, renovation etc - in which case the cycle is immaterial "if the entry price is right."


HOWEVER when he says

“Everything in business or investments is all about your entry price or purchase price,”

Well in Yellow Brick road's case property turnover is more important than your entry (or exit) price ......


I'm certainly not anti property, over the very long term it will go up due to the inflation deliberately built into the economy. (People always feel better when they are getting year on year pay rises and when ipso facto house prices rise over the long term)

Right now it's a great hedge against currency debasement ...... in the US.
However I am always cognisant of the fact that international debt markets could change over any 36 month period and a small uptick in nominal interest rates (at these rates) is a big uptick in percentage terms.

I have made most money from property when there is a built in capital gain available.

The easiest time to buy property in general for a capital gain is when interest rates are at the top of their cycle (above the reversionary norm) and suppressing property prices .... I'm not sure if that is the case right now ?!
You can then realistically expect reversion to the norm over time and a tail wind of capital gain.


Property purchase must always be viewed on a macro, regional and micro level.

In NSW right now there is pent up demand for property and the O'Farrell government is about to open up large tracts of new development .... so if you want to buy on the fringes of Sydney, in general, there is going to be a cap on growth. On the other hand he is also committing to undertake some major capital works eg: tunnelling under Parramatta Road

That doesn't mean that you shouldn't buy - it's just that you need to understand the environment you are buying into ..... and don't look to mortgage brokers or estate agents for advice.

You need to read further afield to decide whether the tailwinds are stronger than the headwinds on the specific property you're thinking of buying .... join a property group to get fellow long term investors views and joint access to property databases.

Good Luck