tag:blogger.com,1999:blog-25714039.post7326165978021479366..comments2023-10-26T00:17:28.411+08:00Comments on A Private Portfolio: It's a strange (property) world (2)traineeinvestorhttp://www.blogger.com/profile/05179861120801348035noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-25714039.post-18167758864105212962007-03-28T20:35:00.000+08:002007-03-28T20:35:00.000+08:00Rental yields have been dropping steadily in many ...Rental yields have been dropping steadily in many places for well over a decade (Australia, NZ and UK come to mind). I am not convinced that rental yield alone is indicative of a bubble - if it was it would have suggested selling in a number of places while the bull market was still in its infancy.<BR/><BR/>The issue is that supply and demand for buying properties is driven by different factors than the supply and demand for rental accomodation. As an example - the availability of credit is a key factor in demand from property buyers but of limited relevance to renters. <BR/><BR/>I certainly agree that there are times when it is better to rent and invest than to buy. That said, I would never want to be in a position where I did not own a property in the city where I live. The risk of being priced out of the market if it goes up is very real.traineeinvestorhttps://www.blogger.com/profile/05179861120801348035noreply@blogger.comtag:blogger.com,1999:blog-25714039.post-4958137467573164122007-03-27T11:06:00.000+08:002007-03-27T11:06:00.000+08:00Hi,I agree with your comments on appreciating prop...Hi,<BR/><BR/>I agree with your comments on appreciating property prices in cities, although I have to say I find it dangerous when property prices grow too far away from rents.<BR/><BR/>When the rental yields drop, it usually signals a bubble in the market, which innevitably gets correct.<BR/><BR/>The reason for this, in my view, is that any supply-demand argument made for the price of housing, should also apply to rent. Any growth in housing prices without a corresponding increase in rent is probably only a factor of increased speculation, higher credit availability etc. which usually has dissasterous consequences.<BR/><BR/>At the end of the day, we're all investors, and if we can get a better return putting our money in savings accounts and renting (which is the case in Australia), then most people will opt to do that.<BR/><BR/>Just my view anyway ;)Anonymousnoreply@blogger.com