# Borrowings invested in property is the best hedge against inflation



## cremeegg (18 Jun 2022)

Borrowings invested in property are the best hedge against inflation.


----------



## noproblem (18 Jun 2022)

cremeegg said:


> Borrowings invested in property are the best hedge against inflation.


Interesting comment.


----------



## Brendan Burgess (19 Jun 2022)

Hi cremeegg

Would you expand on the point, with examples, so that we can tease it out. 

Thanks

Brendan


----------



## ArthurMcB (19 Jun 2022)

Isnt it similar to saying savings left idle in bank account is eroded by inflation so the opposite is to borrow money and given that house prices generally at least rise (with inflation) then you are well hedged against inflation if those borrowing are invested in property.


----------



## cremeegg (19 Jun 2022)

Brendan Burgess said:


> Hi cremeegg
> 
> Would you expand on the point, with examples, so that we can tease it out.
> 
> ...


A property bought today for €100k will have a nominal price of €265,330 in 20 years time under inflation of 5%. (100 x 1.05^20)

A loan of €100k taken out today, assuming no capital repayments, will have a nominal amount outstanding of €100,000 in 20 years time.



As a benchmark a salary today of €28,571 (i.e. €100k / 3.5) will be €75,808 in 20 years under the same inflation.


----------



## jpd (19 Jun 2022)

What about the interest payments?


----------



## cremeegg (19 Jun 2022)

jpd said:


> What about the interest payments?


That is irrelevant to the underlying point.

Though of course in practice it is an important question. The utility of owning the property may offset the interest payments. Whether that is rental income or just benefit of using the property, living or working in it.


----------



## Brendan Burgess (19 Jun 2022)

cremeegg said:


> A property bought today for €100k will have a nominal price of €265,330 in 20 years time under inflation of 5%. (100 x 1.05^20)



I think you are conflating different issues. 

A property bought today for €100k will be worth €265k in 20 years if property prices rise by 5% a year. 

You could have inflation of  100% over a particular period with a fall in property prices over the same period. 

You could borrow €100k today and find that interest rates take off and exceed inflation.  Interest rates for investment properties are about 4.5% at the moment.  That is a lot. They could well rise higher. 

Rents will probably exceed interest rates.


----------



## Brendan Burgess (19 Jun 2022)

It is better to invest in either property or equities rather than to leave your savings in cash.   Your property is more likely to keep up with inflation than cash + interest on that cash. 

But  investing in property or equities carries risk. I  believe that, for most of us, the potential returns justify the risk comfortably.

But borrowing to invest in property or equities magnifies the risk. 

It will work out well a lot of the time. 
But when it does not work out, it causes such financial devastation to the investor, that I have concluded that one should not borrow to invest in either property or equities.

Brendan


----------



## Sarenco (19 Jun 2022)

Lots of folks invested in leveraged BTLs in 2007 and that hasn’t worked out too well.

Predictions are always difficult, especially about the future.


----------



## noproblem (19 Jun 2022)

Sarenco said:


> Lots of folks invested in leveraged BTLs in 2007 and that hasn’t worked out too well.
> 
> Predictions are always difficult, especially about the future.


Well, one hardly predicts about the past.


----------



## DK123 (19 Jun 2022)

noproblem said:


> Well, one hardly predicts about the past.


 But if we look at the past we can see glimmers of the future perhaps.


----------



## skrooge (19 Jun 2022)

The stock market generally rises as well. However, both are risky and subject to periods of decline.

A proper hedge would likely imply when inflation is low or negative you wouldn't want to be invested in it. 

Not to fly too close to matters of house prices but the logic of property bring a good hedge in a period of (stag)flation may not hold. Rising interests and low growth suggest repayments capacity will be stretched as well. Not a good combination of you're requiring near 10% capital appreciation. 

From a local market perspective I haven't seen any evidence on the tide turning on investors exiting the market.


----------



## cremeegg (19 Jun 2022)

Sarenco said:


> Lots of folks invested in leveraged BTLs in 2007 and that hasn’t worked out too well.
> 
> Predictions are always difficult, especially about the future.


You shouldn't believe everything you read. Really, the sound of people who experienced negative equity in 2013 onward has banished all rational discussion of housing.

I purchased a BTL at the height of the market €250k with a 10% deposit. I borrowed at ECB +0.75 and the investment has been cashflow positive ever since. Today it is generating a very decent return and worth almost what I paid for it. 

Had I lived in it since, my repayments over the last 14 years would have been less than I could reasonably expected at the outset.


----------



## cremeegg (19 Jun 2022)

Brendan Burgess said:


> But borrowing to invest in property or equities magnifies the risk.


For property at least its not the borrowing that magnifies the risk, its the possibility that you cannot meet the cashflow.

And today you can borrow on a long term fixed rate, that is unusual, in Ireland at least, it makes property invest very attractive.

€300,000 over 30 years at a fixed rate of 3% is €1,260 a month. It is unusual that you have that much certainty about an investment. At 5% the repayment is €1,590.

The price you pay for an investment property, known, the finance cost over 10 years, known. The rent you will collect day one, known. The only uncertainty is changes in the rent into the future.


----------



## cremeegg (19 Jun 2022)

Brendan Burgess said:


> I think you are conflating different issues.
> 
> A property bought today for €100k will be worth €265k in 20 years if property prices rise by 5% a year.


Yes.



Brendan Burgess said:


> You could have inflation of  100% over a particular period with a fall in property prices over the same period.


I am not sure I follow. Are you saying that inflation generally could be 100%, but property prices might fall against that background.

Obviously property does not have to move in lock step with broad measures of inflation, however both inflation generally and property prices are connected to wages, both as cause and effect. Higher wages means more money driving inflation usually including property prices, higher prices driving wage demands.



Brendan Burgess said:


> You could borrow €100k today and find that interest rates take off and exceed inflation.


Yes and in the past this was a concern, however interest rates were always only one part of the repayments on a C&I mortgage.

Today however you can borrow at 10 years fixed. This is a significant development.



Brendan Burgess said:


> Interest rates for investment properties are about 4.5% at the moment.  That is a lot. They could well rise higher.
> 
> Rents will probably exceed interest rates.


Yes


----------



## noproblem (19 Jun 2022)

cremeegg said:


> For property at least its not the borrowing that magnifies the risk, its the possibility that you cannot meet the cashflow.
> 
> And today you can borrow on a long term fixed rate, that is unusual, in Ireland at least, it makes property invest very attractive.
> 
> ...


Thousands thought like above, reality bit and the rent didn't get paid. That put paid to above scenario in an awful lot of cases.


----------



## NoRegretsCoyote (19 Jun 2022)

The point is the following. High inflation reduces the real value of cash balances on deposit. So €100k today is worth €75k in today's money after three years of inflation totalling 25%.

Meanwhile if you buy a property for €100k today you still have a property in three years.


----------



## DK123 (19 Jun 2022)

cremeegg said:


> For property at least its not the borrowing that magnifies the risk, its the possibility that you cannot meet the cashflow.
> 
> And today you can borrow on a long term fixed rate, that is unusual, in Ireland at least, it makes property invest very attractive.
> 
> ...


BTL borrowing with 100 % morgage would   sure magnify the risk,so maybe keep it down to the"sound sleep level"say 65 or 70% of the value of the property being bought and use cash for remainder.I  bought BTL house in 1978 and i sure wish i could have had access to a 30 year morgage like cremeegg, s e.g. above.The repayments would have been a lot smaller from day one and they would have evaporated over the next 30 years.I always thought of it as me having no repayments as the rental income was used for the repayments.It is a long term investment but after 20 years i had a valuable asset morgage free.With a variable rate morgage the equity increased with house price inflation over the years and the equity  also increased because a portion of the capital was being included along with the interest payments each year thus reducing the outstanding amount of the morgage.Another small plus on the tax side was being able to claim the interest rate on repayments against the rental income.So in my humble opinion and from my bit of experience i would have to say that borrowing for investment property is one of the best if not the best hedge against inflation.


----------



## Brendan Burgess (19 Jun 2022)

cremeegg said:


> You shouldn't believe everything you read. Really, the sound of people who experienced negative equity in 2013 onward has banished all rational discussion of housing.



@cremeegg

Would you believe the Central Bank statistics from 2015?



There were €26 billion in buy to let mortgages outstanding, of which €8 billion were in arrears.

There were 30,000 accounts out of 138,000 accounts. That's 20%.

A further 19,000 were restructured and no longer in arrears. That's 14%

So at that point in time, 34% of those with mortgages on buy to lets were suffering stress.  Their credit records were ruined.

It could well be 40% or even 50% were in arrears at some stage during their mortgage.

I am guessing that half of these were on tracker mortgages so the repayments were relatively low - probably lower than when they took out the mortgages.

The other half probably did ok and were glad they borrowed to invest in property.   They are a bit richer now.

But many lives were seriously damaged by borrowing to invest.

It is not a theoretical issue about the discomfort of  negative equity.  It's lives ruined.

I will repeat my belief that investing your own funds in property is better than leaving it in a cash deposit. But borrowing to invest in property is risky.  

Brendan


----------



## Brendan Burgess (19 Jun 2022)

cremeegg said:


> €300,000 over 30 years at a fixed rate of 3% is €1,260 a month. It is unusual that you have that much certainty about an investment. At 5% the repayment is €1,590.



Even at these rates, borrowing is very risky.

But are these rates available today?

These are  AIB's rates for Buy to Let



I can't see any lender offering longer than 5 year fixed, but I don't know the market well enough, so there may well be someone offering 30 years at 3%? 

Brendan


----------



## PebbleBeach2020 (19 Jun 2022)

If you had a house (PPR) with a mortgage, it would make sense, if you afford it, to retain the property as a rental, if moving to another PPR or purchasing a property. 

You could retain a buy-to-let at a much reduced interest rate.


----------



## Brendan Burgess (19 Jun 2022)

Hi PebbleBeach

It would certainly be better to hold onto a PPR as a rental if you have a cheap tracker than to buy an investment property at Buy to Let mortgage rates. 

But in most of the Money Makeover cases where this has been analysed, it has generally been better to get rid of the first home and use the equity to pay down the mortgage on the new property. 

But each case must be looked at on its own merits.

Brendan


----------



## ClubMan (19 Jun 2022)

PebbleBeach2020 said:


> If you had a house (PPR) with a mortgage, it would make sense, if you afford it, to retain the property as a rental, if moving to another PPR or purchasing a property.
> 
> You could retain a buy-to-let at a much reduced interest rate.


For most people this would mean concentrating most, if not all, of their net worth in one asset class and geographic region (Irish domestic property - and leveraged with borrowing at that) leading to a severe lack of diversification and all the concomitant risks.


----------



## NoRegretsCoyote (20 Jun 2022)

Brendan Burgess said:


> But many lives were seriously damaged by borrowing to invest.


The problem was _excessive _leverage, not leverage itself.

Take a landlord who bought an apartment in 2007 for €400k at a 50% LTV on a tracker for 30 years. Their mortgage started around €1100 and fell to about €600 by 2009.

Rent probably started at €1400, declined to €1,000 in 2012 or so, and is maybe €1,700 again now.

Negative equity was very small and very brief, and property was always at least breakeven on a cashflow basis after tax. For the last half a decade generating a comfortable cash surplus. By now with an LTV of 30-ish %.

This landlord has made more with 50% leverage than with 0%, while of course 100% would have ruined them. There is a happy medium.


----------



## Brendan Burgess (20 Jun 2022)

Hi Coyote

The best leverage is  0%. 
That is the least-risky hedge against inflation. 

You are right that the 100% loans were a big cause of the problem. But don't forget that those who got 100% loans, generally got cheap trackers. 

These days, you can't get 100% loans but you can't get cheap trackers either. 

When things are going well, as they are at the moment for most landlords, there is an assumption that the good times will continue forever.  They won't.   There will be very bad patches ahead. Most landlords will survive and still be around for the recovery. 

But many leveraged landlords will get into serious difficulty. 

Is 60% LTV safe?  It's certainly safer than 100% LTV. But it's not safe. 

The safest is to avoid borrowing altogether. 

Brendan


----------



## NoRegretsCoyote (20 Jun 2022)

Brendan Burgess said:


> But don't forget that those who got 100% loans, generally got cheap trackers.


Trackers weren't cheap when they got them! In 2007 people were paying 5% interest on properties that yielded 4%. With a 100% LTV this was always incredibly risky as you were subsidising your mortgage from Day 1 in the hope of capital appreciation!




Brendan Burgess said:


> Is 60% LTV safe? It's certainly safer than 100% LTV. But it's not safe.


Leverage always introduces risk. The issue is whether it's tolerable for buyer and seller. The arithmetic is very different today because yields are so much higher.

Suppose I had €200k and wanted to be a landlord. I would happily take €200k in borrowing at 5% and buy two apartments yielding 8%. Risk of not being able to sell very low for me, and risk of non-recovery of capital very low for the bank in event of default. I'd be diversified too - even with prolonged non-payment of rent on one property I'd still be able to cover the mortgage payments from the other.

It would increase my return for not a huge extra amount of risk. It would also be profitable for the bank.


----------



## DK123 (20 Jun 2022)

NoRegretsCoyote said:


> Trackers weren't cheap when they got them! In 2007 people were paying 5% interest on properties that yielded 4%. With a 100% LTV this was always incredibly risky as you were subsidising your mortgage from Day 1 in the hope of capital appreciation!
> 
> 
> 
> ...





Brendan Burgess said:


> Hi Coyote
> 
> The best leverage is  0%.
> That is the least-risky hedge against inflation.
> ...


I think if you go below say 50% LTV [leverage] on a well located residental property for renting then you are "playing your cards so close to your chest that you cannot see them"perhaps.


----------



## Brendan Burgess (20 Jun 2022)

DK123 said:


> "playing your cards so close to your chest that you cannot see them"



A great expression which I had not heard before. 

Brendan


----------



## Gordon Gekko (20 Jun 2022)

There’s a level of borrowing that’s appropriate, and it’s neither 0% nor 100%.

Being too cautious is dangerous in itself.

Imagine saving to buy a property rather than using some leverage.


----------



## Brendan Burgess (20 Jun 2022)

Gordon Gekko said:


> Imagine saving to buy a property rather than using some leverage.



We are not talking about buying a home where borrowing is necessary. 

We are talking about borrowing to buy a risky investment.

Brendan


----------



## Gordon Gekko (20 Jun 2022)

Brendan Burgess said:


> We are not talking about buying a home where borrowing is necessary.
> 
> We are talking about borrowing to buy a risky investment.
> 
> Brendan


But borrowing to invest in a rental property is “okay” once it’s at a prudent level.


----------



## Brendan Burgess (20 Jun 2022)

Investing in property or shares is risky.

Once you borrow, you increase that risk, unnecessarily. 

Clearly a 20% LTV is less risky than a 100% LTV. 

But there is no need for it, so it shouldn't be done. 

Brendan


----------



## elcato (21 Jun 2022)

Brendan Burgess said:


> Investing in property or shares is risky.


Can't really compare imo. You always have a plot/site/house in property amd you choose when to quit. In shares that decision is often out of your hands and you are kicked out with a big loss. Eircom being a prime example.


----------



## ClubMan (21 Jun 2022)

elcato said:


> In shares that decision is often out of your hands and you are kicked out with a big loss. Eircom being a prime example.


With property you can't schedule stop/limit orders at a particular price like you can with shares.


----------



## Purple (21 Jun 2022)

elcato said:


> In shares that decision is often out of your hands and you are kicked out with a big loss. Eircom being a prime example.


In any investment doing your due diligence really well should allow you to avoid the really bad decisions. Eircom being a prime example.


----------



## zander1983 (7 Sep 2022)

Just came across this thread - I have a similar one. I broadly agree that property is the best and safest hedge against inflation. So then, why are all the landlords leaving? Genuine question. 2 possibilities: 1/ they dont understand the thesis the OP outlines above, or 2/ the thesis outlined above applies elsewhere, but not here, where landlord properties rights have been eroded by every political party for years, and will be further eroded soon when SF are elected.


----------



## NoRegretsCoyote (7 Sep 2022)

zander1983 said:


> I broadly agree that property is the best and safest hedge against inflation. So then, why are all the landlords leaving?


Mainly because of tax.

Say you are 45 and have surplus cash and you want to boost retirement income. You would be crazy to put it into property given that the income to buy the property has been taxed, capital gains if it appreciates in value will be taxed, and rental income would be taxed. Compare that to pension contributions where you get tax relief on the way in, capital gains are untaxed, and only pay tax on drawdown (and can take out 25% tax free).


----------



## joe sod (7 Sep 2022)

jpd said:


> What about the interest payments?


Interest rates reduce the demand for all assets , that's the reason why stock markets and especially bonds fall when interest rates are rising.
 Property is slightly insulated from this due to the lag effect but eventually interest rates reduce the price of property as well, remember the 1980s after the massive interest rate rises during the 70s.
I know you are making the same point jpd

Another factor missed is that we have already had extraordinary property price increases in the western world over the last 2 decades even when we had little inflation in other things. Now the price of energy and food and other basics are experiencing very high inflation. Therefore inflation has now to play catch up in all the areas that had very low inflation for years. Property does not fall into that category. If people are paying much higher prices for fuel and food and paying higher interest rates on debt they are not going to have any ammunition to throw at a property bubble.


----------



## DublinHead54 (7 Sep 2022)

Trying to work this out in my head. Inflation is based on the CPI that includes mostly the costs of goods and services, and not debt.

My monthly mortgage payment of 1k is insulated from inflation, it is the bank that is exposed to inflation i.e. the money I give them can buy less goods and services.  

If my company decides to give me a pay rise of 9% to match inflation, theoretically that should create a net 0 benefit as it provides additional income to pay for services that have higher prices now. I could reduce my spending and direct that additional pay rise towards my mortgage, which would be a benefit. 

inflation may be a factor that increases / decreases house prices, but there are lots of factors that drive house prices.


----------



## NoRegretsCoyote (7 Sep 2022)

Dublinbay12 said:


> Trying to work this out in my head. Inflation is based on the CPI that includes mostly the costs of goods and services, and not debt.


Mortgage interest *is *included in the CPI. From the CSO:



> House purchases could represent the acquisition of a major capital asset (investment) rather than consumption, so purchase without a mortgage and capital repayments of a mortgage are excluded. *Mortgage interest payments are included, since for most homeowners they are the best measure of the shelter cost of utilising their dwelling.* Major home improvements, such as building an extension, are capital investments and so are excluded but re-decoration and maintenance are included.



For elaborate reasons mortgage interest is not included in the HICP, the EU measure.


----------



## zander1983 (7 Sep 2022)

NoRegretsCoyote said:


> Mainly because of tax.
> 
> Say you are 45 and have surplus cash and you want to boost retirement income. You would be crazy to put it into property given that the income to buy the property has been taxed, capital gains if it appreciates in value will be taxed, and rental income would be taxed. Compare that to pension contributions where you get tax relief on the way in, capital gains are untaxed, and only pay tax on drawdown (and can take out 25% tax free).



Yes but you can use leverage unlike with a pension - you only need 30% down for your investment. Property will increase in value. If it goes up in value by 10k in 1 year, you've made returns of 33%.


----------



## zander1983 (7 Sep 2022)

joe sod said:


> Interest rates reduce the demand for all assets , that's the reason why stock markets and especially bonds fall when interest rates are rising.
> Property is slightly insulated from this due to the lag effect but eventually interest rates reduce the price of property as well, remember the 1980s after the massive interest rate rises during the 70s.
> I know you are making the same point jpd
> 
> Another factor missed is that we have already had extraordinary property price increases in the western world over the last 2 decades even when we had little inflation in other things. Now the price of energy and food and other basics are experiencing very high inflation. Therefore inflation has now to play catch up in all the areas that had very low inflation for years. Property does not fall into that category. If people are paying much higher prices for fuel and food and paying higher interest rates on debt they are not going to have any ammunition to throw at a property bubble.



Property inflation is very different to food and energy. Property is a scare asset, made scarcer by every increasing Big Government and therefore ever increasing regulation, and companies funded by central banks buying up all the property. Leo Varadkher in 2021: "the problem of ‘cuckoo funds’ swooping in to buy up Irish property is due to ‘banks worldwide printing money’". So i dont see property prices not inflation - its how our flawed monetary system actually works.


----------



## Purple (7 Sep 2022)

zander1983 said:


> So i dont see property prices not inflation - its how our flawed monetary system actually works.


Can you explain that please?


----------



## zander1983 (7 Sep 2022)

Purple said:


> Can you explain that please?


Well we've had an awful lot of money printing since 2008. Money are claims on resources. These claims are increasing exponentially, but the resources are not - as we can see with the energy crisis. Those close to the source of the printing - governments and large corporations - benefit since they can borrow this printed money and buy assets, usually property. By the time it reaches us, its inflation - everything costing more. Hence you have Blackrock as the United States' biggest landlord and Blackstone as Spain's biggest landlord. The companies are obviously rushing in here over the last few years. They are buying these assets because property is scarce, inflation is high and cant be otherwise due to increase in M2, and so a property is a good hedge. Leo Varadkher's comment in 2021 is one of the few times Ive seen this acknowledged, but there are more politicians in the US who speak about this.  So property prices are unlikely to come down without some sort of fundamental system change or failure. All of our policies targeting "greedy" landlords over the past few years are a crude attempt to fight the above phenomenon. So in general, I think buying property is still the best investment as the phenomenon above is so strong.


----------



## cremeegg (7 Sep 2022)

zander1983 said:


> Just came across this thread - I have a similar one. I broadly agree that property is the best and safest hedge against inflation. So then, why are all the landlords leaving? Genuine question. 2 possibilities: 1/ they dont understand the thesis the OP outlines above, or 2/ the thesis outlined above applies elsewhere, but not here, where landlord properties rights have been eroded by every political party for years, and will be further eroded soon when SF are elected.


Are all the landlords leaving.

Small scale landlords do seem to be leaving, large investment funds seem to be keen to invest in property.

While I am not generally in favour of following the herd, if I had to pick a herd to follow I know which it would be.


----------



## cremeegg (7 Sep 2022)

Brendan Burgess said:


> @cremeegg
> 
> Would you believe the Central Bank statistics from 2015?


Apologies Brendan for not replying, I didn't see your post.

In short the CB is saying that 34% of BTL mortgages outstanding in 2015 were in trouble. So when anyone or his dog could get a BTL one third made a mess of it.

And they had to work hard to make a mess of it


NoRegretsCoyote said:


> The problem was _excessive _leverage, not leverage itself.
> 
> Take a landlord who bought an apartment in 2007 for €400k at a 50% LTV on a tracker for 30 years. Their mortgage started around €1100 and fell to about €600 by 2009.
> 
> ...


----------



## cremeegg (7 Sep 2022)

The original point of this thread was that leveraged property is the best hedge against inflation.

A 2 bed apartment within 20 mins of O Connell St. is a 2 bed apartment within 20 mins of O Connell St. irrespective of the rate of inflation. 

€1,500 in the bank in May 2021, would have paid my electricity bills for the subsequent year. €1,500 in the bank probably will not.

Leverage to buy that apartment certainly increases risk (though not in the simple way often suggested here) but it does improve the hedge against inflation.

Leveraged property does provide a greater hedge against inflation than unleveraged property. At the cost of introducing some extra risk.


----------



## DublinHead54 (8 Sep 2022)

NoRegretsCoyote said:


> Mortgage interest *is *included in the CPI. From the CSO:
> 
> 
> 
> For elaborate reasons mortgage interest is not included in the HICP, the EU measure.



How should I think about this in practice? Inflation is dynamic whilst interest rates are sticky (fixed term). 

From a CSO perspective is it not self defeating to include mortgage interest? Interest rates are increased to reduce inflation, and then you include that increase in CPI keeping it higher, rinse and repeat.


----------



## NoRegretsCoyote (8 Sep 2022)

Dublinbay12 said:


> From a CSO perspective is it not self defeating to include mortgage interest?



The CPI should be a (normative) measure of prices faced by households on the basis of a representative basket of goods and services. That is what the CSO is measuring. The HICP (the EU measure) does not include mortgage interest.



Dublinbay12 said:


> How should I think about this in practice? Inflation is dynamic whilst interest rates are sticky (fixed term).


In 2022 so far my income has risen but my mortgage costs have stayed the same leaving me (partially) better off. I don't expect this situation to persist however!


----------



## CorkHome2022 (2 Dec 2022)

Brendan Burgess said:


> I think you are conflating different issues.
> 
> A property bought today for €100k will be worth €265k in 20 years if property prices rise by 5% a year.
> 
> ...


If a person had purchased in 2008 at lets say 300k they have seen their property drop through the floor and are just about back on level terms today , while the next few years will be good in terms of inflating that 300k price again from an internal market due to shortage of supply we must appreciate that the global out look as per the IMF is "Gloomy and more uncertain " so the premise of 165% increase is very optimistic .


----------



## Silversurfer (2 Dec 2022)

CorkHome2022 said:


> If a person had purchased in 2008 at lets say 300k they have seen their property drop through the floor and are just about back on level terms today , while the next few years will be good in terms of inflating that 300k price again from an internal market due to shortage of supply we must appreciate that the global out look as per the IMF is "Gloomy and more uncertain " so the premise of 165% increase is very optimistic .


Property is like the stock market where timing is everything. To go back to the original post where the time frame was 30 years. Which 30 years out of the past 50 years was the best time to buy property in? Sell in? Or rent in? The current exodus of landlords is perhaps generational? There was once a time when property was considered a good buy for pension purposes. This coincides with the current generation who are + or - 5 years to retiring.


----------



## ClubMan (2 Dec 2022)

Silversurfer said:


> Property is like the stock market where timing is everything.


You or others can live in a house, but not in a share...


----------



## Silversurfer (3 Dec 2022)

ClubMan said:


> You or others can live in a house, but not in a share...


My mistake. I thought the post referred to BTL and investment properties. Therefore I consider my analogy to be valid.


----------

