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What is your prediction for the next two years?

Discussion in 'Investing Strategies' started by tropic, 5th Feb, 2008.

  1. tropic

    tropic Well-Known Member

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    Polish your crystal ball and share your prediction.
    What do you think will perform better (in general) for 2008/2009?
    ASX and property market?
    Where will be the best performing property market?
    What will be the best performing shares?


    My guess will be low CG (inflation rate + 2%) for both property and shares.
    Best property market Sydney.
    Best shares BHP, RIO & QBE.
     
  2. Tim

    Tim Well-Known Member

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    I think property will perform better than shares in 2008-2009. I think property will continue to rise, particularly lower end property in NSW coastal and Sydney, and SE QLD, plus Adelaide.

    I think shares will be volatile and will average around 8% each year. Best shares will be resources and banks.

    Tim
     
  3. Glebe

    Glebe Well-Known Member

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    With interest rates rising, I can't see property doing much. I see rents rising which will lead to better yields though. Shares the winner for me.
     
  4. Billv

    Billv Getting there

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    Considering the high interest rates I believe property price increases will be low.
    Rental vacancies are at an all time low and will get even lower.
    Rents will go up as a result.
    Shares I believe will be up and down but in the longer term they will average lower than current levels.
    My 2 c
    Cheers
     
  5. Tim

    Tim Well-Known Member

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    I think higher interest rates lead to a property slow down but if you look at the 80's property boom house prices kept rising until 18%, it took this much to slow them down, so I think that we will have a cycle of:

    1) Inflation
    2) Interest rate rises
    3) Higher rents
    4) Lower end property increases
    5) Higher interest rates
    6) Unemployment due to global economic slowdown
    7) Property values drop off
    8) Interest rates go back down
     
  6. gekko_99

    gekko_99 Member

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    My gut feel is that property and shares will be positive this year although interest will be higher and in light of that if there is a premium over interest it might not be enough. So I think reducing leverage and trying to improve the quality of my asset base for a stronger growth period next year or in a few years might be the way to go. This is mostly due to me thinking shares and property may have had their day in the sun and its the moneys turn for a bit.

    I'll know what I should've done in a year or two!
     
  7. samaka

    samaka Well-Known Member

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    True, however property was a lot more affordable back then - meaning you still spend a small percentage of your take home pay on your mortgage. That's not the same today.
     
  8. crc_error

    crc_error The Rule of 72

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    My prediction is interest rates will raise to 12% over the next 2 years.

    Property will continue to grow, but between 5-8%.. Yeilds will raise to 5% as rental market will continue to tighten as property investors flee property.

    first 6 months will be a flat market with volatility - great time for covered calls, where the 2nd 1/2 of the year will see the sharemarket continue to run giving 2009 a 20% gain and 2008 a 10% gain.

    Interest rate raises will have little effect on property or share prices as there will continue to be a shortage of property stock.. Rudds schemes will only push up property prices, and tax cuts will offset interest rate rises giving people more borrowing power..

    In a nut shell, next 2 years will be great! next 6 months will give you some time to position yourself before the next run!

    Happy Investing! :D
     
  9. vandalic

    vandalic Active Member

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    My personal opinions for the next 2 years

    Stock market will go up and down within the 5000s/early 6000s over the next 6-12 months. However, will move back towards late 6000's/early 7000's territory, as the underlying fundamental value of Australian companies is still very strong.

    Property will grow moderately, with continued strong growth in areas where supply is limited with strong demand such as 5km of Brisbane CBD & Sydney with prices between houses and townhouses/apartments growing closer.

    Interest rates will rise once or twice this year, with a decline over the next 2 years to 5.5-6%.
     
  10. Tim

    Tim Well-Known Member

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    Josh your's is the most accurate prediction I suspect - time will tell!

    Tim
     
  11. vandalic

    vandalic Active Member

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    We'll definitely have to come back to this one in 2 years Tim :)
     
  12. MattR

    MattR Well-Known Member

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    Manly to win the NRL in 2009!
     
  13. Rod_WA

    Rod_WA Well-Known Member

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    Thanks for the tip Matt. Now I know where to invest for the next 2 years. What odds can I get?:p
     
  14. Smartypants

    Smartypants Well-Known Member

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    You forgot to insert the words 'wooden spoon' between NRL & in ;)
     
  15. tropic

    tropic Well-Known Member

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    Code:
    My guess will be low CG (inflation rate + 2%) for both property and shares.
    
    I like to make a correction on my prediction.
    It will be a low return (CG + Dividend) = inflation + 2% for shares.
    I am hoping too be wrong and pleasantly surprised.