House prices to keep rising for years

kincella said:

but there are heaps of affordable housing even in the cities.....its just not right smack in the middle of the city....although there is a stack of cheap houses for the uni students....

and prices will not stagnate at all....because there are plenty of average people who can afford the houses....and then there are the wealthy people, who can afford a lot more...

people immigrate to australia because its just so much more of a comfortable style of living then where they came from

people are migrating from regional and country areas to the cities....the govts do not provide incentives for people to move away from the city....
the situation will only get worse...with everyone wanting to live in the bigger cities...no one wants to move to a suburb, or country area...where housing is cheaper....

Click to expand...

wayneL said:

Kincella,

It's raining cash. Under the circumstances there is no surprise.

We just don't know the ultimate cost yet. But you'll probably be dead when it's time to pay the piper.

Click to expand...

kincella said:

...
and when selling a house...its the buyers that make the offers....up to me to accept or decline...would you sell a house for 100k if the market was 180k with several willing buyers prepared to pay 180K ????
what would you do in the same circumstances ???

Click to expand...

That's capitalism.

Nothing wrong with it either, just don't kid yourself.

Click to expand...

The Australian dream of home ownership is slipping away, leaving a threat of a US-style collapse in house prices, according to a team of university researchers.

Analysis by researchers from South Australia's Flinders University has revealed home ownership in the 10 years from 1996 rose only 0.8 per cent despite strong economic growth and low interest rates in that period.

The Flinders Institute for Housing, Urban and Regional Research analysis found home ownership fell by 15 per cent over the two decades to 2006 for low income earners over 45 years of age and medium-high income earners under 45 years.

Other findings included large gains in national income from the resources boom were "wasted" by increasing house prices and accumulating debt to unreasonable levels.

The analysis found the first home owners scheme boosted home purchases for people under 25 years of age but many lower income earners in the 25-44 age bracket were unlikely to ever own their own homes because their parents were spending their inheritances and prices remained high.

Dr Joe Flood, the institute's adjunct professor, said the "the writing is on the wall for the 'Australian dream'."

"The country that promised limitless land, cheap housing and near universal home ownership to all comers now has the most expensive housing in the world amid very tight housing and land markets and little prospect of restoring the balance," Dr Flood said in a statement on Monday.

"As long as the government, the public and the media remain in denial, and self-congratulatory rhetoric continues that Australia has cleverly avoided the housing market correction it needed to have, there is little chance that matters will improve.

"The only ways that this would happen are through a US-style price collapse or a complete re-evaluation of the situation and a coordinated effort by governments, planning and financial institutions to restore the balance between housing supply and demand - or tax away the imbalance - so that all Australians may benefit."

Dr Flood and his team assessed Census data to conclude that Australia's housing market is in "a very dangerous and unstable situation which has received little adverse attention".

The researchers found that after 1996, average house prices increased by three times on average - to around 6.8 times medium household income - and debt levels surged.

"On the one hand Australia is vulnerable to a collapse like the United States, where prices fell by a half during the sub-prime collapse ... or to a long slow decline as in Japan since 1988," Dr Flood said.

Click to expand...

"As long as the government, the public and the media remain in denial, and self-congratulatory rhetoric continues that Australia has cleverly avoided the housing market correction it needed to have, there is little chance that matters will improve.[/b]

"The only ways that this would happen are through a US-style price collapse or a complete re-evaluation of the situation and a coordinated effort by governments, planning and financial institutions to restore the balance between housing supply and demand - or tax away the imbalance - so that all Australians may benefit."

Click to expand...

gfresh said:

When they want their nest egg as cash they have to sell, unless they are positively geared for passive rental income. With our ****ty yields here in Aus, that's not so likely.

Click to expand...

Taltan said:

Mofra I think Gfresh is reffering to their rental properties. Once the boomers retire and their marginal tax rate goes to 15% they will no longer have the tax need to be property speculators. Hence they will sell. It is the investment properties that are leveraged not the PPRs

Click to expand...

moXJO said:

Hey Beej
What’s your opinion on the possibility of a construction boom heading our way?

Click to expand...