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  • Originally posted by RonHoyFong View Post
    You will need twice the amount of what's required today, unless you own it of course.
    About 165k pa.
    But you already knew that.

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    • Good on you Drelly, get the advice that comes free or cheap and learn by doing.


      Something I was going to post a few days ago:

      Now the 8 years doubling thing has been mentioned by Ron again. This is an exponential growth model.

      If something doubles over a period of time, that is exponential growth. Doesn't matter if it's 1 year, 8 years or 100 years, it's still exponential. it will just take a little longer to really explode i.e. for the line on the graph to go vertical.

      Now if incomes and most other things are also growing exponentially, then this might be sustainable. But I reckon it's not.

      At some point it has to slow down. Otherwise a property is going from $2million to $4million in 8 years, then to $8 million in another 8, then $16 million and so on.

      This isn't sustainable is it?
      Squadly dinky do!

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      • Davo - Hard to say in isolation. There are so many factors that can affect house prices for different reasons in different places. We may continue to get exponential growth whereas Australia will run out of water and turn to desert... who knows. If the world population continues to grow, I think NZ will do well out of it. Of course, we may all need to learn Mandarin.
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        • Originally posted by Davo36 View Post
          Good on you Drelly, get the advice that comes free or cheap and learn by doing.


          Something I was going to post a few days ago:

          Now the 8 years doubling thing has been mentioned by Ron again. This is an exponential growth model.

          If something doubles over a period of time, that is exponential growth. Doesn't matter if it's 1 year, 8 years or 100 years, it's still exponential. it will just take a little longer to really explode i.e. for the line on the graph to go vertical.

          Now if incomes and most other things are also growing exponentially, then this might be sustainable. But I reckon it's not.

          At some point it has to slow down. Otherwise a property is going from $2million to $4million in 8 years, then to $8 million in another 8, then $16 million and so on.

          This isn't sustainable is it?

          As long as the milk price doubles every 8 years, property will follow...

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          • ^ I think you need to cut down the amount of Kahlua you seem to be adding

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            • Originally posted by Davo36 View Post

              Now if incomes and most other things are also growing exponentially, then this might be sustainable. But I reckon it's not.

              At some point it has to slow down. Otherwise a property is going from $2million to $4million in 8 years, then to $8 million in another 8, then $16 million and so on.

              This isn't sustainable is it?
              I'm with Davo exponential growth can not continue indefinitely

              2012 600,000
              2020 1,200,000
              2028 2,400,000
              2036 4,800,000
              2044 9,600,000
              2052 19,200,000
              2060 38,400,000
              2068 76,800,000
              2076 153,600,000
              2084 307,200,000
              2092 614,400,000
              2100 1,228,800,000

              100 years of doubling. Yeah right

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              • Originally posted by drelly View Post
                I've seen Ron speak and he does provide a lot of useful info. I've never paid him anything but if I did decide to, it would not be based on his predicitve powers of the size of the next boom, it's timing and so on. Rather, I would seek to gain the knowledge and skills he passes on to be able to make my own decisions. I seek to be an investor in my own right. Not a sheep. If I wanted to be guided by the nose, there are plenty of companies selling properties as investments.
                He argues his case and gives some good reasons why he thinks there will be a boom. I don't agree with all of them, but I think it's great that he backs them up.

                To have a hypothesis (eg there will be a property boom between 2010 and 2020), you need to define your endpoints (how much do prices have to rise before it constitutes a boom). We're not asking for exactly what prices will be in 2020, only what is the minimum required price rise to constitute a boom, or a boom of all booms.

                You can word it as a null hypothesis- that there will be no property boom between 2010 and 2020. Then if the data fails to reject the null hypothesis, and favours his alternate hypothesis, we can tell him how clever he is.

                Perhaps a statistician on here can explain it better.

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                • Originally posted by HermanZ View Post
                  I'm with Davo exponential growth can not continue indefinitely

                  2012 600,000
                  2020 1,200,000
                  2028 2,400,000
                  2036 4,800,000
                  2044 9,600,000
                  2052 19,200,000
                  2060 38,400,000
                  2068 76,800,000
                  2076 153,600,000
                  2084 307,200,000
                  2092 614,400,000
                  2100 1,228,800,000

                  100 years of doubling. Yeah right
                  It might be possible if we had a period or several periods of hyperinflation.

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                  • What may well happen in the mean time is the government decides to issue a "New New Zealand Dollar" which is worth $100,000 "New Zealand Dollars". This is then followed by another reprinting in three decades where the "New New Zealand Dollar" is replaced by the "New New New Zealand Dollar", worth $100,000 "New New Zealand Dollars".

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                    • Why issue a "New New Zealand Dollar"?
                      Just join up with Zimbabwe.
                      "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

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                      • The exponential thing only seems impossible looking forward but go check property prices from say 60 years ago. You could buy a section in Herne Bay for a few hundred dollars.
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                        • My parents bought a section at Kinloch, Lake Taupo in 1959.
                          They paid the equivalent of $2200 for it.
                          This was a bit more than what dad's annual salary was.
                          In the mid 1970s they had a 3 b/r summit stone house built on it
                          which cost about $45000.
                          Mum sold the property 4 years ago for $1.3m.
                          "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

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                          • when i was a lad

                            you could walk into a dairy with 1 cent

                            and buy 2 or 3 of the cheapest lollies in a small white paper bag

                            or post an unsealed letter with a 2 1/2 cent stamp

                            not even 40 years later

                            10cents isn't enough to buy even 1 lolly

                            and postage has also increased in the hundreds of % range

                            inflation is an insidious thing

                            my own ventures into real estate were based on the fear that the easiest way to deflate the nz property bubble

                            was to let inflation run a little higher than normal

                            until the savers had paid off the debtors borrowings

                            3 years later

                            it seems to me that we are still slowly progressing along that course
                            Last edited by eri; 24-01-2012, 08:36 PM.
                            have you defeated them?
                            your demons

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                            • I do agree that exponential growth can't continue purely because there will be too many numbers to deal with easily. We'll just knock off some zeroes and continue. Much like Italy did changing from the Lira to the Euro... perhaps not the most encouraging example...
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                              • what we have in common with italy

                                is that

                                entitlements are increasing

                                faster than productivity

                                and there is nothing yet on the horizon

                                to suggest that is going to change
                                have you defeated them?
                                your demons

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