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27 Apr 2017

US Residential Property: Worst financial decision

Sydney siders don’t understand, Melbournians do not understand, in fact the majority of the Australian population does not understand the impact of residential property prices falling or failing to grow.

The link below takes you to a story which provides an underlying message about the danger of making a large investment in a single growth asset that then subsequently fails to grow.

The investor purchased a residential property in the United States in 2005 and failed to make money but would the story be different if the investor had purchased after the 2008 global financial crisis which resulted in US residential property prices halving on average?

Yes because it would then have become a story about buying a growth asset at a substantial discount.

The point of sharing this story is to remind you all that growth assets such as property and shares cannot be trusted in the short term.

Both the property market and the stock market can substantially drop in price at anytime and without any warning and that then presents an opportunity to buy, not sell.

Click for link.


At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.

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