Weekday reading picks: How to lose money and frustrate people

Do people who buy houses always finish as winners?  I guess that's up to you to decide based on the best information available.

1) Most people that rely on housing as an investment strategy lose money according to this report, Macro Business:

http://www.macrobusiness.com.au/2016/03/easter-special-report-the-negative-gearing-bible/

2) As the saying goes, those who do not learn from history are doomed to repeat it.  This article talks about the land bubble of the 1880s in Australia.  Does it sound at all familiar?

"Probably the most interesting cycle was the colossal land boom of the 1880s, followed by the equally large bust of the 1890s, a period of euphoric and very irrational expectations. A speculative mania spread like wildfire among Australians, centred in Melbourne. A bubble in commercial land prices formed, feeding into the residential property market. From 1887 to the peak in 1891, housing prices increased by 32 per cent, only to collapse by 31 per cent over the next half a decade. The bursting of this enormous land bubble resulted in the worst depression in recorded history."

http://www.theaustralian.com.au/business/business-spectator/a-sore-lesson-from-housing-history/news-story/23f9caef3a4bca26538f189870c3376e

The above article by Phillip Soos is worth reading.  He argues that we are in the midst of a housing bubble and though it's not a popular view point, it seems that the data supports his views.

3) Do not buy a house to turn a profit according to this analyst:
http://gsm.ucdavis.edu/research/real-estate-bubble-crystal-ball-great-depression-and-manhattan-home-prices

4) NAB predicts housing prices in 2017 to flat-line at best, according to the SMH:
http://www.smh.com.au/business/property/sydney-melbourne-house-prices-to-flatline-in-2017-says-nab-20160715-gq6c3i.html

5) House prices always go up?  History says otherwise:
http://economyandmarkets.com/markets/housing-market-markets/heres-how-much-manhattan-fell-during-the-great-depression/

I'm continuing to see more investors try and leave the real estate market locally.  Spouting what a great investment a house is does not add up if a potential purchaser asks just one question: If it's such a great deal, such a wonderful investment, why are they selling?!

Disclaimer: for professional advice seek guidance of the relevant professional.


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