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Properties for sale / Offering better yields each year
« on: July 23, 2008, 09:37:42 AM »
When analyzing the long term yields from property assets over the past fifty years, the yields tend to fall during a recession in the market and rise during a subsequent boom. The interwar period during the late 1960?s and the early 1970?s was dominated by depression in the stock and property markets. Because government stocks offered certainty of yield compared with equities and other property interests, its yield was consistently lower. Furthermore, under the ?cheap-money? policy, the money supply was increased and, with no change in liquidity preferences, the price of government bonds rose significantly.
However, in the late 1970?s yield on fixed-money-interest-bearing assets including Free Ground Rents (FGRs) was still low in comparison with equities and freeholds. Earnings on ordinary shares and property started rising with the general increase in prosperity and the gradual dismantling of controls. Historically too, yields on equities had always tended to be higher than the yield on government stock because of the greater risks involved. This risk factor dominated until the early 1980s. Thereafter the yield on ordinary shares and eventually on freeholds became lower than the yield from other investments. Thus we now have the phenomenon called the ?reverse yield gap?, a situation caused by inflation.
After the early 1980s there was a significant improvement in the state of affairs in all sectors of the economy. Investments in properties became widespread and Land for Sale in India had many takers due to the possibility of continuous appreciation in land values over a period of time.
However, in the late 1970?s yield on fixed-money-interest-bearing assets including Free Ground Rents (FGRs) was still low in comparison with equities and freeholds. Earnings on ordinary shares and property started rising with the general increase in prosperity and the gradual dismantling of controls. Historically too, yields on equities had always tended to be higher than the yield on government stock because of the greater risks involved. This risk factor dominated until the early 1980s. Thereafter the yield on ordinary shares and eventually on freeholds became lower than the yield from other investments. Thus we now have the phenomenon called the ?reverse yield gap?, a situation caused by inflation.
After the early 1980s there was a significant improvement in the state of affairs in all sectors of the economy. Investments in properties became widespread and Land for Sale in India had many takers due to the possibility of continuous appreciation in land values over a period of time.