Society/Culture Australian Property Prices to Crash?

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HirdsTheWord

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Jun 19, 2014
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Should be more than that, are you not adding super growth each year. Unless I'm totally fluffing this

10k - each year contribution without inflation

1.1 - 10% yearly super fund growth on average

(230k+10k)*1.1 = 264k

(264k+10k)*1.1 = 301.4k

That's the next two years unless I'm ballsing this up
I'm not sure but 3 million is a huge super number. maybe the calcs are a bit off. I don't think super is cumulative interest year on year.

My projected Super balance at retirement is 1.2 million based on;

- my salary of 170k
- Age of 33
- Current Super Balance 95k
- Employer Contributions of 12%

1637641788804.png


if i take your calculation method of (90k+10k)*1.1 and apply it to myself I get the below.......Doesn't seem right.

Age 65 - $4.1m of super........

1637642326727.png
 
Last edited:

Madas

Club Legend
Aug 16, 2020
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Should be more than that, are you not adding super growth each year. Unless I'm totally fluffing this

10k - each year contribution without inflation

1.1 - 10% yearly super fund growth on average

(230k+10k)*1.1 = 264k

(264k+10k)*1.1 = 301.4k

That's the next two years unless I'm ballsing this up
Plug it all into this calculator mate
They are pretty accurate and take into account average fees etc

 

Madas

Club Legend
Aug 16, 2020
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I'm not sure but 3 million is a huge super number. maybe the calcs are a bit off. I don't think super is cumulative interest year on year.

My projected Super balance at retirement is 1.2 million based on;

- my salary of 170k
- Age of 33
- Current Super Balance 95k
- Employer Contributions of 12%

View attachment 1285770

if i take your calculation method and apply it to myself i get the below.......Doesnt seem right.

Age 65 - $4.1m of super........

View attachment 1285779
That would be nice 😊
 

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Madas

Club Legend
Aug 16, 2020
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We're looking at signing paperwork to build a 3rd property, 250sqm block and will put a low maintenance house on it. Probably be all in at 500k or less
Rent it out claim depreciation, still early 30s and earn less than six figures.


Done rough calcs on my super too, very conservative I'll have 6 million if I work for another 30 years but I don't trust the government,they'll see everyone having millions and they'll fu** us somehow with super in 20-30years.
Hirdy mate
If there’s one bit of advice I can impart to you with my extra 20 odd years on the planet is don’t get caught up in the frenzy of these boom times . It isn’t real and doesn’t last .
Trust me I got my fingers singed in the 2007 boom and learnt a lot from it .
Based on your super calculations it Sounds like you are taking the best case returns into account when working your future investment forecasts .
Be careful if you are basing your equity calculations on your Existing properties to finance new investments.
Be conservative and best to plan for the worst case scenario not the best , that way everything else is a bonus.
Just my humble advice , tread your own path but do it carefully.
 

HirdsTheWord

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Jun 19, 2014
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Hirdy mate
If there’s one bit of advice I can impart to you with my extra 20 odd years on the planet is don’t get caught up in the frenzy of these boom times . It isn’t real and doesn’t last .
Trust me I got my fingers singed in the 2007 boom and learnt a lot from it .
Based on your super calculations it Sounds like you are taking the best case returns into account when working your future investment forecasts .
Be careful if you are basing your equity calculations on your Existing properties to finance new investments.
Be conservative and best to plan for the worst case scenario not the best , that way everything else is a bonus.
Just my humble advice , tread your own path but do it carefully.
Not too mention the 6 million he reckons hell have is completely wrong judging by the way he has calculated his super.
 

Madas

Club Legend
Aug 16, 2020
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Not too mention the 6 million he reckons hell have is completely wrong judging by the way he has calculated his super.
Yes that’s what I was getting at .
Going back through the thread there was talk of throwing down a 3rd investment property.
Not my place to judge but if he’s using the same β€œ calculator β€œ for his super as he is for his property equity and borrowing capacity , I would be hearing alarm bells !
 

HirdyLannister

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Apr 26, 2013
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I'm not sure but 3 million is a huge super number. maybe the calcs are a bit off. I don't think super is cumulative interest year on year.

My projected Super balance at retirement is 1.2 million based on;

- my salary of 170k
- Age of 33
- Current Super Balance 95k
- Employer Contributions of 12%

View attachment 1285770

if i take your calculation method of (90k+10k)*1.1 and apply it to myself I get the below.......Doesn't seem right.

Age 65 - $4.1m of super........

View attachment 1285779
I'm sitting at 230k in super at 33 years old, I started full time work at 16 and was adding extra until a purchase a house.

All I can do is use prior results for a rough guess and super grows at 10% on average.
 

HirdsTheWord

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Jun 19, 2014
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I'm sitting at 230k in super at 33 years old, I started full time work at 16 and was adding extra until a purchase a house.
Even starting at 230k you wont have 3 million in super by the time you retire.

you are doing your math's wrong.
 

FRUMPY

Brownlow Medallist
Aug 18, 2006
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Wrong or right calculation he's doing the right thing by putting more in than just super guarantee. Every bit helps. More you put in now the better you'll be off later in life

(But as the ads say 'past performance is no indication of future performance')

Sent from my CPH2005 using Tapatalk
 

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HirdsTheWord

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Jun 19, 2014
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This is a pretty good article for anyone interested.

And it confirms what i have been banging on in here at nauseum. There is no clear body responsible for housing affordability.

 

Gigantic

Brownlow Medallist
Aug 31, 2014
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Should be more than that, are you not adding super growth each year. Unless I'm totally fluffing this

10k - each year contribution without inflation

1.1 - 10% yearly super fund growth on average

(230k+10k)*1.1 = 264k

(264k+10k)*1.1 = 301.4k

That's the next two years unless I'm ballsing this up

I'm not sure but 3 million is a huge super number. maybe the calcs are a bit off. I don't think super is cumulative interest year on year.

My projected Super balance at retirement is 1.2 million based on;

- my salary of 170k
- Age of 33
- Current Super Balance 95k
- Employer Contributions of 12%


if i take your calculation method of (90k+10k)*1.1 and apply it to myself I get the below.......Doesn't seem right.

Age 65 - $4.1m of super........
You're missing the 15% tax on super

Also haven't included management fees (which can really eat into over time)

And 10% is a pretty generous assumption by any standards, most calculators would probably use something between 7-8% (unless you plan on staying high growth option even in your 60s)
 

Gigantic

Brownlow Medallist
Aug 31, 2014
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I'm not sure but 3 million is a huge super number. maybe the calcs are a bit off. I don't think super is cumulative interest year on year.

My projected Super balance at retirement is 1.2 million based on;

- my salary of 170k
- Age of 33
- Current Super Balance 95k
- Employer Contributions of 12%

View attachment 1285770

if i take your calculation method of (90k+10k)*1.1 and apply it to myself I get the below.......Doesn't seem right.

Age 65 - $4.1m of super........

View attachment 1285779
Here you go, I quickly did it with a growth rate of 8% p.a and applying fees and tax

1637758764053.png


Which comes out just a bit more than the calculator.
 

Number37

Anyhow, have a Winfield 25.
Oct 5, 2013
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I'm sitting at 230k in super at 33 years old, I started full time work at 16 and was adding extra until a purchase a house.

All I can do is use prior results for a rough guess and super grows at 10% on average.
The closer you get to retirement the lower the return on your super, for 2 reasons, (1) the greater the return the greater the risk. You wouldn't want to risk all that $$$ you have accumulated chasing 10% when you can get 5% with far less risk. (2) 5% of $1m (your balance later in life) is the same as 10% of $1/2m (your balance earlier in life)
 

HirdyLannister

Norm Smith Medallist
Apr 26, 2013
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You're missing the 15% tax on super

Also haven't included management fees (which can really eat into over time)

And 10% is a pretty generous assumption by any standards, most calculators would probably use something between 7-8% (unless you plan on staying high growth option even in your 60s)
The closer you get to retirement the lower the return on your super, for 2 reasons, (1) the greater the return the greater the risk. You wouldn't want to risk all that $$$ you have accumulated chasing 10% when you can get 5% with far less risk. (2) 5% of $1m (your balance later in life) is the same as 10% of $1/2m (your balance earlier in life)
Thanks, looks like I'll need to buy more property then to support myself.
 

Pessimistic

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I think I see a pattern:

rising house prices: β€˜experts’ predicting house prices to β€˜crash’

falling house prices: β€˜experts’ advising to buy cos house prices to rise sharply

There seems to be a complete absence of people predicting rising market to keep rising, or a falling market to keep falling, which is probably what happens 95% of the time
 
Jul 24, 2021
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I think I see a pattern:

rising house prices: β€˜experts’ predicting house prices to β€˜crash’

falling house prices: β€˜experts’ advising to buy cos house prices to rise sharply

There seems to be a complete absence of people predicting rising market to keep rising, or a falling market to keep falling, which is probably what happens 95% of the time
In 1992ish all economists predicted they would go lower after initial crash.
In 1987 they said it would fall lower than expected.

Maybe you're under 50.
 

Herne Hill Hammer

Premium Platinum
Jun 22, 2008
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This is such a massive , difficult topic and one which I would love to see change within my generation.
The main finger pointing seems to be aimed at Negative Gearing fuelling speculation , which I agree with but feel that the majorities opinions are being clouded by the craziness that is happening in Sydney and Melbourne where ( correct me if I’m wrong) people are buying / building/ renovating all with the intent of flipping it as soon as possible to the next person with the same idea .
This is boom mentality that doesn’t last too long - maybe 2-3 years ( although Sydney seems to be an anomaly?)
To get to my point, and with full disclosure I am someone who has taken advantage of NG as a form of forced savings and investment for retirement.
Theres a difference between the majority of mums and dads ( like me) who buy a rental with the intent of keeping it till retirement and the crazy speculators fuelling this fire in Sydney/ Melbourne.
I can’t be certain but I’d be pretty sure that a lot of people like me who don’t understand shares and possibly haven’t contributed to super as much as they should have as it wasn’t so common in our earlier days or they may be self employed use property as an investment tool for retirement.
My message to those who are anti NG is to be considerate of people like us and also the fact that one day you may be in the position to take advantage of it as an investment tool .
Yes I think the laws around ownership of the property should be strengthened ( property needs to be held for 3-5 years instead of 12 months before CGT is applied, perhaps cap the amount of properties that can be owned to 3 including the primary residence, tighter controls on overseas investment and who actually owns the property)
But as far as NG being a drain on the economy when in reality it is a great tool to provide rental accommodation , maybe aim your angst at the Googles , Facebooks , Mining Companies , corruption etc draining massive amounts of cash out of the country. If you could harness that money to be put towards more public housing you would see real change.
The problem now is all of the long term rental stock is being swallowed up by Airbnb and other short term rental options. Why have a family living in your house paying you $4 or 500 a week in rent when you can jam it full of beds and rent it out for $1,000 a weekend and be able to use it yourself when you want?

I live on Phillip Island, there are currently 3 rentals available in Cowes where I live and only 7 others on the rest of the island. Families are posting almost daily on the local fb buy, swap and sell pages, desperate for a rental for them and their families.

I see stories almost daily from WA, NSW and Qld about a massive rental shortage.
 

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