Property

As many of you know, we have long been supporters of the REA Group (ASX: REA) story with the company a longer term holding in both our domestic and global funds.

Initially we were attracted to the very high rates of return on equity and little or no debt – a function of the company’s dominant position and its ability to charge higher prices even after a decade of competitors offering the same service for free. continue…

by Roger Montgomery Posted in Companies, Property.

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Earlier this week, The Australian – the newspaper I write for fortnightly – updated their reporting of Australian property mogul Harry Triguboff’s view on property prices.

Separately this week, UBS reported the results of a survey of almost 1000 Australian mortgage holders who borrowed in the twelve months to August 2017.  They observed; “Our 2017 survey found factually accurate mortgage applications fell to just 67 per cent. There are now ~$500 billion in ‘Liar Loans’ on the banks’ books.” A third of borrowers admitted to understating their living expenses. continue…

by Roger Montgomery Posted in Editor's Pick, Property.

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When REA Group (ASX:REA) announced the FY17 full year results the shares fell six percent (they’ve since recovered). REA Group reported an underlying profit for the full-year FY17 of A$228.3 million, which was up about 12 percent. Most of the growth can be attributed to growth in the more expensive ‘premium’ depth ads, and much of the growth came from higher prices. continue…

by Roger Montgomery Posted in Companies, Property.

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Conventional wisdom would suggest that, in a softening property market, any company exposed to property will suffer operationally. While that might be true for developers and builders, it might not be true for REA Group. continue…

by Roger Montgomery Posted in Property.

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After a previous post on negative gearing, a reader asked us what an investment property would look like from a company value analysis perspective. Good question. Here’s my attempt to answer it. You may find it useful when considering your next investment decision. continue…

by Andreas Lundberg Posted in Editor's Pick, Property.

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For some years we‘ve advocated for our investment in Australia’s dominant real estate portal, REA Group. For us, REA ticks all the boxes.  It’s a well-run business with high returns on equity and an ability to raise prices in the face of excess supply – without an adverse impact on unit sales volume. continue…

by Roger Montgomery Posted in Property.

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The negative gearing debate continues to heat up. And well it might. It’s a classic argument between the ‘haves’ and the ‘have nots’, focusing on one of the things we hold most dear: affordable housing. If we take a dispassionate view, it’s not hard to see which side of the debate has more merit. continue…

by Andreas Lundberg Posted in Property.

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by Roger Montgomery Posted in Editor's Pick, Property.

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Last month we created our own smashed avo index as a tongue-in-cheek way of analysing housing price affordability. The reception since then has been more than we anticipated and there’s probably a couple of points to note up-front. continue…

by Scott Shuttleworth Posted in Property.

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Consumer spending has risen strongly in the past year, spurred on by property owners feeling richer due to higher house prices. This is called the household wealth effect. But with house prices looking toppy, should retailers – and investors – be concerned about the effects of a property market correction? continue…

by Andreas Lundberg Posted in Consumer discretionary, Property.

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