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Saving For a Space Ship

Property Has Been Best Investment For Last 50 Years

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Just seen this tv ad for new Phil & Krusty C4 homes prog. (Be warned as it had a smarmy image of Phil in a bath, thankfully not Krusty).

EDIT: "25th April 20:00 Kirstie and Phil: Where Best to Invest

You can still make money from property, you just need to know where to look... and Kirstie and Phil show you as they count down the ten best places to invest in the UK. "

I thought that property had not overtaken the stock market in investment returns over the long term. If so I suggest a complaint to Ombudsman / ad commission etc. Maybe this is the case in over 50 yrs, so I would be grateful if the stock boffins could confirm this.

Krusty has no doubt become an economic investment guru from her work with PiePal

Edited by Saving For a Space Ship

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I think I read somewhere that stocks have always outperformed property over the long haul:

http://moneycentral.msn.com/content/invest...bes/P119557.asp

From the start of 1980 to the end of 2004, home sales prices increased 247%. A pretty sweet deal, it would seem. Over the same period, however, the S&P 500 shot up more than 1,000%.

Looks like equities have outperformed houses by about 4X.

I STM in 2003 and invested part of the proceeds in stock markets around the world. Returns have been about 20% p.a.

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they mean a geared investment? or just with cash?

If you compare the stock market to getting a morgage and buying a house probably, but thats the same as getting a loan and investing in the stock market (which i guess would give you an even better return)

Edited by moosetea

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they mean a geared investment? or just with cash?

I'm not sure. Loking for info on the prog, I've found this updated list of tv prog property porn for masochists

http://www.aboutproperty.co.uk/property-ty...36;15133367.htm

http://www.aboutproperty.co.uk is new to me

Edited by Saving For a Space Ship

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I think I read somewhere that stocks have always outperformed property over the long haul:

http://moneycentral.msn.com/content/invest...bes/P119557.asp

From the start of 1980 to the end of 2004, home sales prices increased 247%. A pretty sweet deal, it would seem. Over the same period, however, the S&P 500 shot up more than 1,000%.

Looks like equities have outperformed houses by about 4X.

I STM in 2003 and invested part of the proceeds in stock markets around the world. Returns have been about 20% p.a.

But isnt that taxed? making it a much worse investment than a house?

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The 'House Parasites' (Kirsty, EAs et al) always trot this nonsense out about property being the best long term investment.

Strip out inflation however and the 'real' returns made on property don't look that brilliant over the last 50 years. Much also depends on when you buy and when you sell. Anyone who bought a flat (sorry, 'luxury apartment') in 1988 and sold in 1993 would have taken an absolute beating.

Property moves in cycles and we are currently at the top of one of the biggest ever recorded. I'll leave you to work out what will happen next.

Edited by Red Baron

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The 'House Parasites' (Kirtsy, EAs et al) always trot this nonsense out about property being the best long term investment.

Strip out inflation however and the 'real' returns made on property don't look that brilliant. Much also depends on when you buy and when you sell. Anyone who bought a flat (sorry, 'luxury apartment') in 1988 and sold in 1993 would have taken an absolute beating.

Property moves in cycles and we are currently at the top of one of the biggest ever recorded. I'll leave you to work out what will happen next.

Next you'll be telling me that all those people who bought gold in 1980 or thereabouts didn't make a massive profit.

Seriously though, a few days ago we were discussing how VIs were starting to describe HPI over ten year time spans as more recent measurements made it look like a bad investment. If they're talking about property being the best investment in the last 50 years, then the time spans are getting bigger.

Billy Shears

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House prices over the last 50 years have kept pace with inflation. I.E. its always been around 3.5x wages apart from peaks (such as today)

Over 50 years with the same amount of money in the stockmarket as would have bought a house, you would have made a mint if you knew how to invest it.

Property investment is a No-brainer; for the financially inept. apart from the successfull builders that is.

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over the long term property can only go up by inflation plus real wage increases and even at that why should they continue rising by more than inflation? if there was an excess supply in all major markets this would be the case but planners governement etc prevent anything approaching perfeect competition in provision of housing,maybe if government competed with private sector like it did in 50's /60's HPI would moderate to around CPI +approx .5 percent.

theres a case for the governement intervening in housing market to circumvent the vagaries of the market and build more when prices rise and less when prices are stagnant/falling.

yes mr blair build new towns and affordable housing throughout the uk and compete with the private sector.the governement has many advantages over the private developer and could reduce HPI

Edited by ronnie

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I saw the advert for this program. I personally think it is misleading... C4 have gone the extra step from "look at my lovely home going up in value" (like Location x3) and "invest to upgrade property" (Property Ladder) to "speculation on property is a winner". The last program by Kirsty & Phil about the 10 best and worst places and their predicted HPI had very little foundation that didn't merit any such program - it was just property hype.

I do disagree with encouraging speculation; it's out right irresponsible. C4 should show due care and attention!

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Stocks need to outperform property. It is business that creates the wealth that allows property to increase in value.

If property increased in value more than the stock market over time, resources would be sucked from the wealth-producing sector of the economy, to one that does not, reducing growth and thus the ability to pay ever higher amounts for property.

Looked at another way, investors in stocks need to be compensated for taking the higher risk. If property consistently produced the highest returns and was a safer investment, no company would ever receive funding.

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Update:

After a bit of thought, I have phoned up Channel 4 and complained about this matter today, I have asked them to stop or change the trailer, if they cannot show me where they got this info. to prove that housing has outperformed other investments over the last 50 years.

While trying to complain, I was suprised to find no easy way to complain on the C4 website, such as a button on the a-z page http://www.channel4.com/atoz/a-z.jsp?searchKey=C so I complained about that too.

If others complain as well it may speed it up. You have to phone viewer enquiries 020 7306 8691 and/or email viewerenquiries@channel4.co.uk

Send a letter to:

Viewer Enquiries

Channel 4 Television

124 Horseferry Road

London

SW1P 2TX

It would be useful if we had pinned on hpc, a page with links to complain abouth the media, ads, trade assoc's and the like to the Ombudsman etc. as 'evil prospers if good folks do not act'

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It would be useful if we had pinned on hpc, a page with links to complain abouth the media, ads, trade assoc's and the like to the Ombudsman etc. as 'evil prospers if good folks do not act'

I agree. Webmaster - please could you set-up an area for this? Perhaps a pinned thread?

Edited by OzzMosiz

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Stop Press!

I've got the tv on in the background as I work from home. The same C4 ad came on again but I'm sure it said 20 years not 50. I may have misheard it, but was 90% sure. Is there any truth in housing outperforming other investments over 20 years ?

I'll phone C4 again-

Edit : apparently they tell me, C4 would not have acted on my complaint so quickly. Obviously it may have been changed anyway.

I wonder if tv prog ads are covered by the Advertising Standards Authority ? http://www.asa.org.uk/asa/about/

Edited by Saving For a Space Ship

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For most people there's no contest. Unlike equity investment, most homes are paid for by borrowing (interest payments may offset the rent).

Suppose you invest £20,000 in shares, which after five years are worth £40,000, including reinvested dividends. That implies an average annual return of 15%.

Alternatively, you could use the £20,000 as a deposit on a £200,000 house, which then rises by an average of 7% a year over five years, to £280,000. Comparing the total capital gain of £80,000 with the initial stake of £20,000 gives an annual return of almost 50%.

This ignores the added benefit of being in charge of ones own home.

Edited by 737

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For most people there's no contest. Unlike equity investment, most homes are paid for by borrowing (interest payments may offset the rent).

Suppose you invest £20,000 in shares, which after five years are worth £40,000, including reinvested dividends. That implies an average annual return of 15%.

Alternatively, you could use the £20,000 as a deposit on a £200,000 house, which then rises by an average of 7% a year over five years, to £280,000. Comparing the total capital gain of £80,000 with the initial stake of £20,000 gives an annual return of almost 50%.

This ignores the added benefit of being in charge of ones own home.

Same could be said for buying a 200K house and it dropping 40% - loss of 80K

Whereas 20K in shares drop of 40% is a loss of 8K

Edited by OzzMosiz

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It rather depends on where you choose your start and end points, if you can conveniently omit or include a bull run or collapse in a given market you can make the figures suit your needs. If property goes off the boil over the next two years then it can totally screw up the 50 year stats, because it will eclipse all else.

BuyingBear on a bicycle can overtake a Porsche, provided the car is slowing down and the bike is heading down a big hill.

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It is 20 years.

You can see the advert here: http://www.channel4.com/dontmiss/ (middle of the page)

Edit: Does anyone know how to save those movie files to disk? As i'm sure it will move off that web page soon.

I have also emailed regarding their source.

Edited by Jason

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It is 20 years.

You can see the advert here: http://www.channel4.com/dontmiss/ (middle of the page)

Edit: Does anyone know how to save those movie files to disk? As i'm sure it will move off that web page soon.

I have also emailed regarding their source.

Thanks for the confirmation Jason, I think we have them by the 'Short Phil and Krustys', as changing it from the last 50 yrs to 20yrs proves it was wrong, otherwise why change it?

Of course, they still have to prove the 20 yrs. I will put my complaint in writing tommorrow as well by recorded post, as they may ignore emails, despite taking my phone complaint as they said they only respond to email or letter enquiries.

Given this new development it seem safe to complain to the official orgs & broadcasting commissions.

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The place to complain about this misleading trailer would be Ofcom. ( Broadcasting Watchdog and also shuts down pirate radio stations)

Talking of pirate radio, someone should set one up to promote the idea of a HPC.

I have just thought of a perfect name, Crash FM

Edited by Spoony

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I've just checked a video from Wednesday night (19th), and an advert during Grand Designs said 20years. Has anyone proof it originally said 50 years?

Also, has the FTSE outperformed property over the last 20 years?

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      • down 5% +
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