Interest down to..... 0!

[Chriselle 158]

Originally Posted By: Tex

Originally Posted By: Chriselle

I've had fabulous returns on land investing in Canada. Just buying some more as we speak. So, I keep my emergency reserve in my Japanese bank accounts but the rest is either tied up in investments or briefly sitting in our Canadian accounts until the next opportunity comes along.

I get pangs of regret and an ill feeling when I think about some investment opportunities I passed up in Canada some years ago.

If I had my way I would be living the dream in Golden. Though if they had decent Hang Gliding in Niseko I could see myself there as well. Powder, Flying and Golf *deep sigh*

Now's a good time if you've got capital. I only invest in projects around metro Toronto...the fastest growing market in North America. Golden is a pretty nice area to spend your days.

[NoFakie 45]

Back to the original question, Japanese base rate was about 6% in 1990 and 3-5% before that.

 

All this weird 0% is a post-Bubble hangover. You have to wonder how long they can keep it going.

[Tex 3]

Originally Posted By: Chriselle

Originally Posted By: Tex

Originally Posted By: Chriselle

I've had fabulous returns on land investing in Canada. Just buying some more as we speak. So, I keep my emergency reserve in my Japanese bank accounts but the rest is either tied up in investments or briefly sitting in our Canadian accounts until the next opportunity comes along.

I get pangs of regret and an ill feeling when I think about some investment opportunities I passed up in Canada some years ago.

If I had my way I would be living the dream in Golden. Though if they had decent Hang Gliding in Niseko I could see myself there as well. Powder, Flying and Golf *deep sigh*

Now's a good time if you've got capital. I only invest in projects around metro Toronto...the fastest growing market in North America. Golden is a pretty nice area to spend your days.

Yeh definitely better options than Golden right now but I had had some advice before kicking horse... anyway all my capital is tied up in Aus, with little chance of diversifying these days. EDIT: Actually I missed the boat in Aus more than anything MEH, hindsight is a real PITA.

[Go Native 70]

Originally Posted By: Mr Wiggles

Back to the original question, Japanese base rate was about 6% in 1990 and 3-5% before that.

All this weird 0% is a post-Bubble hangover. You have to wonder how long they can keep it going.

Can't see anything on the horizon that is suddenly going to get the Japanese economy to do anything other than continue to deflate.
A declining and aging population, little inovation and a resistance to changing the way pretty much anything is currently done doesn't fill me with any confidence that it's all going to turn around any time soon.

I really do wonder how any average Japanese people get ahead financially and create wealth. Real estate is not really an investment as there are few places in the country where there are any increases in housing prices. I don't think the share market here offers all that great returns, there's not that many companies I know of here making massive profits and growing. I guess they can invest in overseas markets? Beyond that or having a good job with high wages how can they get any money they've saved working for them? As has been pointed out it's not like they get any interest from banks.

I know for me if it wasn't for the property booms in Aus and Niseko my net worth today would only be a small fraction of what it is.

[Mantas 3]

So why aren't people (with jobs) lining up to buy real estate? Surely with zero or even negative growth, it's still a good investment.

 

Borrow the money at 0 % and get a rental return of what, say 2 to 6%?

[Mantas 3]

Originally Posted By: Go Native

The big issue in Aus is there just isn't enough new cheaper housing for those just getting started. And the fact that the current generation doesn't seem to want to work their way up to their dream home over time. They want it all now, the big house in a good suburb with two cars, massive TV, etc, etc. They borrow to the absolute limit of what the banks will let them and then all it takes is interest rates to go up a couple of percent and they're buggered. .

That's a pretty stereotypical view of a 'young person today' but it's not that reflective of the young people I know that are busting their arse trying to get a start within 200 km of where they grew up and all their family and friends reside. I'm not saying it isn't true, but a lot of young people just see this mountain too hard to climb. Why spend the best years of their lives (three times longer than we would've) living like a hermit, trying to achieve a dream that might not come true anyway. It's little wonder they fill their lives with plasma TV's car etc. I'm not defending them. I just understand their plight.
As illustrated in this graph below of housing affordability ratios. We who got into property before 1996 can tut tut and preach to young people as much as we like. The moral high ground was piece of cake to obtain.

[indosnm 0]

I don't see property being a great investment ATM. (of course there are always a few exceptions)

But.. Yields are low and in many areas I think it will be unrealistic to see much capital growth. People are still buying thinking that they are going to get a bug CG in a short time. Reality is we probably won't see it and you will be better off investing in other areas that can grow your money until growth returns. Yeah, you can get a tax deduction but it costs you to get it. Not many people would invest in a company's shares is it was going to remain flat for 5 - 10 years, but they still do it with property!

 

GN, that place you were taking about in Vicco.. Wasn't the Island?

[NoFakie 45]

Demographically Japan is an accelerating disaster, but the country does not lack innovation. Japan has a large high-tech manufacturing sector with no resources, high wages, high land costs and a currency that has risen and risen again. You can only manage that if you're good at what you're doing. If you innovate, that is.

[seemore 66]

Hi Everyone

 

Long time no speak been too busy too be an integral part of SJ.

 

In regards to Property in Perth we are just purchasing another block to build on and our current build should yeild approx 20%.

These aren't long term rentals they are just too build and sell.

So there are good options out there/here.

 

In regards to property in Japan been looking into buying a place over there and thinking of renting it out short term.

Question: Do you have to pay tax on income to the Japanese Government?

I can write it of over here as Foreign Loss against any future Gain(If that happens).

 

Would love some help.

[Go Native 70]

Originally Posted By: Mantas

That's a pretty stereotypical view of a 'young person today' but it's not that reflective of the young people I know that are busting their arse trying to get a start within 200 km of where they grew up and all their family and friends reside. I'm not saying it isn't true, but a lot of young people just see this mountain too hard to climb. Why spend the best years of their lives (three times longer than we would've) living like a hermit, trying to achieve a dream that might not come true anyway. It's little wonder they fill their lives with plasma TV's car etc. I'm not defending them. I just understand their plight.
As illustrated in this graph below of housing affordability ratios. We who got into property before 1996 can tut tut and preach to young people as much as we like. The moral high ground was piece of cake to obtain.

I just don't see why it is that hard Mantas if you're prepared to lower your expectations for your first home. Lets say we have a young couple both in full time work. The average annual earnings in Australia now for full time employees is just under $65,000 a year. Ok these guys are young so lets assume they are earning well under the average, say only $45,000 per year each. After tax they'll net around $75,000 per year.
I did a quick search of housing prices in the outer suburbs of Melbourne and found heaps of 3 bedroom houses for between $250,000-$270,000. Now lets say they borrow right up to $270,000 and use an interest rate of around 7% their monthly repayments would be about $1,800 on the loan. Between them they are bringing home over $6,200 per month. So just under 30% of their net income would go to repaying the loan still leaving them over $1,000 a week for for living expenditures. Anyway point is not too bad at all and easily manageable.
Thing is after putting in this couples incomes into a calculator from an Australian bank to check how much they could borrow the bank gladly informed me that they could borrow up to $530,000!! So suddenly this young couple happily contemplate living in a more inner city location, more upmarket suburb and suddenly they're up to their eyeballs in debt and are extremely sensitive to any interest rate rises. All it takes is one to lose a job for a bit or anything like that and they're stuffed. If they'd just gone for the outer suburb location to begin with they could easily meet their repayments regardless of any interest rate rises and even if one lost their job for a bit. If all went well they'd even continue to be able to save and put extra payments on the house and gain equity pretty quickly.

Anyway my point is that there are still plenty of options out there for young couples if only they are prepared to lower their standards and ideals for that first home purchase. So they can't live near where their parents do? Well thank god I'd say!

[HelperElfMissy 42]

Originally Posted By: seemore

Hi Everyone

SEEMORE!!!!

Where ya been buddy?!!!
Nice to see you back again

[HelperElfMissy 42]

Originally Posted By: Go Native

Thing is after putting in this couples incomes into a calculator from an Australian bank to check how much they could borrow the bank gladly informed me that they could borrow up to $530,000!! So suddenly this young couple happily contemplate living in a more inner city location, more upmarket suburb and suddenly they're up to their eyeballs in debt and are extremely sensitive to any interest rate rises. All it takes is one to lose a job for a bit or anything like that and they're stuffed. If they'd just gone for the outer suburb location to begin with they could easily meet their repayments regardless of any interest rate rises and even if one lost their job for a bit. If all went well they'd even continue to be able to save and put extra payments on the house and gain equity pretty quickly.

Anyway my point is that there are still plenty of options out there for young couples if only they are prepared to lower their standards and ideals for that first home purchase. So they can't live near where their parents do? Well thank god I'd say!

I agree.
SO much.

Mantas - ya see that spike on your affordability graph? 88/89? Yes?, well that was when we bought our first home. If we had over committed (read: moved in with gardens, carpet and curtains instead of old reclaimed carpet offcuts, newspaper at the windows and sand encircling the house like a moat) - then we would have been paddleless in a murky brown creek not long after. Expectations are too high for most younger people starting out - not all - granted. But MANY. They don't seem to understand that just because your first home is a 3x1 in an area surrounded by state homes, lacking the finery of today's stately MacMansions, that your next home, or the one after that, or the one after that need to be. It will give you something to work for, save for and aspire too. Without a motivation there is no achievement for many - my #1 is prime example of this at the moment. It is like there is a black vortex in his hip pocket sucking every cent he earns into an unknown vacuum.

[indosnm 0]

Sure GN & MB, I agree with people needing to lower their standards but sometimes location can go against you. In the coastal spot where we are if you can find a 2-3bdr x1 for under $350k you are doing well (especially if you are looking for a single title, stuff living in an apartment, have done that in Japan). I could easily afford a house in Casino which is a few hours inland for well under that $350k (actually, could probably get 2 for $350K) but I'm not willing to move all that way to a dust bowl just to be able to get into the market.. Stuff that.

[Mantas 3]

Yes, your senario is entirely possible G.N. and many young people are doing just that. Don't worry I'll be telling my kids about the caravan I lived in for 2 years while saving for a deposit.

The gen Y, greedy, over indulgent, over their heads type is a bit of a media beat up. IMO.

The $1000/week for expenses wouldn't go quite as far as you would think these days in OZ.

 

MB that spike is a mere pimple compare to later years. You went from a ratio of 3 to 4 Not 4 to 7.

 

 

 

[HelperElfMissy 42]

Mantas I acknowledge that affordability is much worse now, of course, but the point remains that while Papa and I kept newspaper taped to the windows for a year, some friends got personal loans to buy nice new curtains and floor coverings, and have the instant garden install by a professional only to provide a nicely finished home to the liquidator.

 

Indo, Gotta tell ya our first home meant a LONG drive across town for Papa, no Freo Doctor (sea breeze) which we were raised on, and a pretty high crime rate. But we were only there 3 years. It was worth the sacrifice as our next 4 homes have never been further than a 15 minute drive to beach....currently about a 15 minute walk. My brother has also spent a few years more than half an hour drive from the beach, and he reckons it almost killed him...he likes to surf every day on his way home from work if possible. He wont be more than 15 minutes drive from the beach anymore either - but he has been living in my parents house with his wife and kids for the last 6 months to achieve the next move.

 

Everyones choices are their own - but if I had to go back to rent inspections, fickle landlords deciding to sell up (time to move) and not being able to put a hook on the wall or paint the kids room...I think I would rather lower my standards and get back in the property market. But I HATE people telling me what to do, inspecting the property every 3 months etc. Drove me NUTS while we did it.

[indosnm 0]

Originally Posted By: Mamabear

Indo, Gotta tell ya our first home meant a LONG drive across town for Papa, no Freo Doctor (sea breeze) which we were raised on, and a pretty high crime rate. But we were only there 3 years. It was worth the sacrifice as our next 4 homes have never been further than a 15 minute drive to beach....currently about a 15 minute walk. My brother has also spent a few years more than half an hour drive from the beach, and he reckons it almost killed him...he likes to surf every day on his way home from work if possible. He wont be more than 15 minutes drive from the beach anymore either - but he has been living in my parents house with his wife and kids for the last 6 months to achieve the next move.

I did my time in Japan for over 10 years more than 3 hours away from the coast! This is my reward (where we are living now) and I don't want to have to travel because I am still catching up on surfs for those 10 years I lost! No complaining though, I am happy to save more to get something around here. Making more $$$ out of the market at the mo than I could in direct property which helps..

So GN, you described yourself as being part of the problem.. So how many houses do you need before you decide to stop or feel you have enough? Part of this whole problem has been fed by investors wanting more,more & more.

[NoFakie 45]

All these threads are the same. They start off about money or saving or interest and ten minutes later everyone is talking about property.

 

How do French, German, etc. people make and save money? It doesn't seem to be by flipping houses.

[Tubby Beaver 209]

Originally Posted By: Mr Wiggles

All these threads are the same. They start off about money or saving or interest and ten minutes later everyone is talking about property.

How do French, German, etc. people make and save money? It doesn't seem to be by flipping houses.

Their grandparents stole Jewish gold??

Only joking

[Go Native 70]

Originally Posted By: Indo

So GN, you described yourself as being part of the problem.. So how many houses do you need before you decide to stop or feel you have enough? Part of this whole problem has been fed by investors wanting more,more & more.

I'll do whatever helps me to reach my goal of retiring at 50. If property investing continues to offer good returns well that's where my money will go. I doubt I'll ever actually stop investing whether it be in housing or shares or whatever. It's fun and I really like the idea of making money without actually having to work much for it, as most of you know I really dislike actually having to work for a living

This property I'm looking at getting in Inverloch is not really just an investment. My wife wants to move back to Australia next year and this will be where we'll live. I made it clear that if we were going to live in Aus it wouldn't be in a city and it had to be somewhere beautiful. Inverloch is certainly that. Although I'm looking at spending time in both Aus and Japan. I couldn't possibly miss the winter here!

[Go Native 70]

Originally Posted By: Mr Wiggles

All these threads are the same. They start off about money or saving or interest and ten minutes later everyone is talking about property.

How do French, German, etc. people make and save money? It doesn't seem to be by flipping houses.

I have no idea how they make and save money. Are they making much money? Living in Japan for nearly the last 7 years hasn't exactly helped me keep up with what's going on in the rest of the world....

One thing I do know though is that smart investors the world over put their money where they'll make the best returns for the least amount of risk. And if that's in housing then that's where they'll invest. If it's something else then that's where the money will go. I must admist to having no idea whatsoever where people in Europe are putting their money.

Personally I'm not an overly smart investor as I don't know all that much about it. Houses are just easy for me. I don't have to have incredible knowledge to get it mostly right. The share market though is a complete mystery. I have money in managed funds because I just haven't got a clue.

If you have some advice on how people make money without investing in property I'm all ears!

[Mantas 3]

Hey.... No one has answered my question yet.

 

Quote:

So why aren't people (with jobs) lining up to buy real estate? Surely with zero or even negative growth, it's still a good investment.

Borrow the money at 0 % and get a rental return of what, say 2 to 6%?

[BagOfCrisps 24]

It's hardly a simple thing to do with a lot of legal hassles involved. And most people simply wouldn't know or be bothered.

 

It's not like going down to Tesco and buying a bag of crisps.

 

Not saying I fall into that category but there are plenty out there who do.

[Go Native 70]

Originally Posted By: Mantas

Hey.... No one has answered my question yet.

Quote:

So why aren't people (with jobs) lining up to buy real estate? Surely with zero or even negative growth, it's still a good investment.
Borrow the money at 0 % and get a rental return of what, say 2 to 6%?

Plenty of people are. It's a good way to get a steady income from an investment and rental returns are actually often 10% or more. I know a lot of people with investments in Sapporo. Looked at it myself, buying a block of 15 or more apartments each being rented out for around Y50,000 per month. If you have good occupancy and can secure the loan you could just about retire on the rental income alone.

I couldn't secure a loan here though...

[KRUSTY 2]

Originally Posted By: Mantas

Hey.... No one has answered my question yet.

Quote:

So why aren't people (with jobs) lining up to buy real estate? Surely with zero or even negative growth, it's still a good investment.
Borrow the money at 0 % and get a rental return of what, say 2 to 6%?

So where can you borrow money at 0%????????? The offical rate may be close to 0% but the real lending rate is closer to 2%.

[Mantas 3]

Originally Posted By: Go Native

l income alone.

I couldn't secure a loan here though...

Why not?