Originally Posted by
Ferg
Interesting thread.....good to know I'm not the only one who does this annually. For the sake of participating in this thread +5% for me across everything....not one of my better years, but there is something else I want to explore.
Per the Black Monday thread IIRC SailorRob you mentioned that equities (i.e. S&P500) outperform property over a long enough time period or words to that effect. I then posted a link to the S&P500 returns and an inflation calculator. I recall having this debate with my father eons ago re shares vs property and I took your position then. But then life and marriage got in the way and one just 'had' to buy a house. I ran my numbers from mid 1997 to mid 2023 (which is a long enough timespan for such a measurement) on my family home transactions. Nominal return was +8% CAGR, after deducting ownership opex and adjusting for 2 x equity injections. This reduces to +5.6% CAGR when adjusted for NZ inflation.
IMO there is NO WAY I could have achieved this level of return on equities over that timeframe and the S&P calculator confirms it. It helped being mortgage free since 2006 and I was lucky enough to ride a couple of waves despite the awful first 5-6 years for NZ property. No interest or rent payments since 2006 has been liberating and likely destroys the own vs rent argument from a weekly cashflow viewpoint. I'm sure others have had a similar experience and whilst my father did not articulate well the 'why' to buy eons ago....I can see why now. Counterpoint: this is simply my anecdote and it may not be representative of broader market data. Something I have focussed on since 2000 was "profits are in the buying"...the selling confirms/crystallises your earlier decision. I'm no property guru; I was lucky.