Compared toother property valuations sydney asset classes alright let’s getstartedalright so right now .
There’s obviously alot of talk around you know property valuations sydney propertyprices being at all-time highs and beingso expensive and you know .
- How a price isclear I’ll hire with you know theearnings multiple basically you know.
- When compared to to income levels youknow being so high everything like thatand .
- While there is potentially you knowsome truth in you know looking at that metric and you.
- know believing thatprices are and did you know hi if you actually.
You know want to make anaccurate comparison you really need tolook at where valuations are incom parison to other asset classes and ifyou’re savvy investor you know generally being you.
Know where the value is canyou know over the long term you knowpotentially give you the best potentialrisk adjusted returns obviously .
Thereare bubbles so you know sometimes beingin the best of it how you play isn’t thebest in .
- The short term but over the longterm you should get the bestrisk-adjusted returns because .
- What you’re buying is you know a solid assetat a reasonable value now if we sort ofstart off.
- By comparing to where the sortof stock markets are right now S&P is the US index that’s.
The top companies in the US they derive morethan fifty percent of their revenue fromoverseas now so it’s actually more of aglobal index if you will and andbasically .
The price to earnings ratio isaround right now that’s taken fromThe Wall Street Journal and basically.
That means in earnings yield of about four point one six percent now .
The dividend yield is only about two percentthe difference is that that other twopercent is being retained in thebusiness for you know growth or actually you know being used for share buybacksso effectively .
The best comparison forwhen you’re looking at you know equityis the verse property you need to lookat the earnings yield so at about fourpoint one six percent .
This is relativelycomparableor to wear Australian property you knowis sitting right now in terms of yieldsnow obviously if you’re looking athigh-end you know very luxurious kind of properties .