the economist and the housing bubble, page-48

re: the economist and the housing -sue 1964,

The voice of experience and reason. Thank you.

I read all the other cr#p leading up to your post and was on the verge of responding to a few of them (that Moneytree person for example) and then I thought why bother?

It is very simple economics.

Land is a finite commodity, especially land which is in desirable locations such as major cities.

People are an increasing commodity, demand is always going up.

This is partially due to population growth through birth and immigration but also because of divorce (one roof becomes two) and kids moving out of home etc.

When you have finite supply with increasing demand what happens? Anyone? Moneytree can you answer that one?

Where is the evidence that this causes property (land) prices to rise? Why only many many many years of ever increasing prices. Is that enough evidence?

There is a rich and steady history that shows that property is a very safe investment. The rantings of embittered people who missed out yet again on another property boom won't "talk down" anything, but please feel free to try.

When Moneytree said "I built property for 20 years. I have owned, bought and sold more property than you have had hot lunches" I knew then and there he is a to$$er and not worth responding to, I mean how inane is that statement? How obvious a lie is that?

I have said before and I say again there are only 3 places you can invest, cash, shares and property.

If you concentrate on only one and ignore the other two you are only costing yourself opportunity.

I am watching and waiting. Houses with a footprint are already seeing declining vacancy rates in Melbourne. My guess is late 2006 we will see bottom as far property prices go and the decline between now and then will be minimal.

When you see the returns move up due to higher rent it won't be long until you will see modest price growth.

In 2009 / 2010 you will see another boom in Melbourne. Sydney and Brisbane maybe a year or two later.