Quote Originally Posted by minimoke View Post
But if you had a mortgage you would have got a 9 – 10% net return for every dollar you paid off. Cashed up people have nowhere so effective to park their spare money.
Thats only a 9-10% return if the property goes up in value. If it stays stagnant, you are essentially paying interest costs, which the price of borrowing. Ie. The opportunity cost to use that money. There is no return if your investment stays the same.

Its exactly the same as borrowing money for a stock on the sharemarket, and it doesnt move all year. You pay back the loan, but the stock is still worth the same. There is essentially a loss on your interest paid - an expense.

I fully understand if property is rising at the same rate of borrowing costs - its a bit like compulsory saving.