So offcoarse some years will be less than 10% or perhaps slightly negative, but on average 10% is achieveable.
for many who plod along on life's journey saving their hard earned (?), inflation is entirely irrelevant
ANZ picks house prices, retail spending to drop
House prices are set to fall 5 per cent and maybe more, a national spending binge will slow to a trickle and the economy will move down a gear to a "benign" patch of soft growth, according to ANZ Bank.
The bank picks the economy to cool from 3 per cent growth last year to just 1.5 per cent this year.
The expected slowdown follows the longest period of economic growth in New Zealand since the 1960s.
"A weak outlook for housing dominates," the bank's latest quarterly forecast says.
The Reserve Bank raised interest rates four times last year to fight inflation and retail sales have flattened since March.
"The housing market has well and truly turned, with house sales (volumes) off over 30 per cent since the start of 2007," ANZ says.
If an average 440k house rose at 10pc p/a for the next 20 years it will be 3m in 20 years.
If the average 55k wage grew at a very robust 5pc it would be 150k in 20 years.
Average house prices in Australia will NEVER get to this price to income multiple.
Itll eventually average out, If not a realestate correction like the rest of the world, then I suspect wages will continue to creep up along with Interest rates eventually bringing the price to earnings muliple back to historical averages.
Constant 10% gains across the entire market would cause mortgage repayments to exceed the median income within 20 years, which is clearly not going to happen.
It is no good talking averages when it comes to property. There is a finite supply of top positions. Those that own them now will get a greater return than those less favoured locations.
The only thing that will reduce the price rise is a reduction in the population and that wont happen for a long time. The old Agents warcry "position, position, position."
Averages, they don't mean a thing when it comes to property.
your wrong with this,...
your are making the mistake of simplifing your calculations,...and leaving out a major sourse of return,.. the rental return
You are not allowing for increased density,... for example your calcultion might say that a 1/4 acre block valued at $3m is not affordable so there fore is not possible,..
but if you put 10 units on it then it becomes afforadable,...
over time the true median home will change, there would have been a time when a 4bed house on a 1/4 acre block was cinsidered the median home. this is not the case anymore.
for many who plod along on life's journey saving their hard earned (?), inflation is entirely irrelevant
Inflation has now risen sharply and home owners have been warned that more rate rises are on the way after the RBA declared the economy needed to slow dramatically to curb price rises.
Average household income is 90k ! subtract some tax, you have perhaps 70k , the average mortgage is 300k , at 9pc and guaranteed to rise rates, you do the numbers.
The majority of pensioners I know are only too aware of the reduction in spending power of the dollar. In fact, most people I know understand that matching inflation (with no tax burden) is really a 0% return.hello,
yes i seriously believe that,
it is a non-event for most,
for many who plod along on life's journey saving their hard earned (?), inflation is entirely irrelevant
thankyou
robots
Great comments and agree. I'm waiting for renoing to go a bit out of favour so I can get fixer uppers at enough of a discount. You almost pay a premium for sh!tboxes because of the competition from renovators over here.
AS ever, the numbers have to add up, plus the factors you mention.
It's not yet though, even with the slump thus far.
There are plently of waterfront condos in Florida selling or 30% discounts to their price of a couple of years ago.
Have you slipped a fact there numpty that you'd rather not have acknowledged knowing?
Perhaps you'll include 90 kilodollars as the basis for all future affordability calculations? Makes a difference, you do the numbers.
ASX.G
Sorry, but property prices cannot indefinitely rise by 10% per annum without wages following the same path.
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