This is a mobile optimized page that loads fast, if you want to load the real page, click this text.

The future of Australian property prices

Jump to new

Further to Dowdy post about new estates with debt, here are my 5 of my mates with there debt to net income.

3.6
2.2
2.3
3.5
1.85

These figures are all true as I seen all incomes and debts levels as they regulary throw around ideas with me. Also interesting to note, only 5 of the 10 people above have a credit card, and all of these people do not spend up big on here credit cards.

More interesting i find is that alot of my uni mates cannot afford to buy property. They are all on god incomes 50-80K, but after rent, car payments and credit card debt they cant afford to. These are the so called educated people as well who have done accounting degrees.
 

So now it's " If China sneezes, we catch a cold".

The truly remarkable thing in the transfer of economic power to Asia, is that it has been gifted to them by the North Atlantic Muppetocracies through sheer arrogance and stupidity.

I'm not going to underestimate the Yanks yet, but at this stage it doesn't look good.
 

Well that sort of example can be created for anything where you are looking at a gross national statistic of course. So I really don't see your point. You are still fretting about a single stat - gross private debt/GDP, without considering all the other pertinent stats like assets and income. Even in your example, if the 4 neighbours with $2.5M in loans each (which you would be getting the interest on technically via the bank), all earned good incomes from export related activities such that they can easily service their loans, and own houses worth $5M each, then everybody wins. They live the lifestyle they want and will in the future have no debt. You perhaps choose to live more frugally, maybe not working at all but live off the interest that your neighbours in effect pay you through their export derived productive earnings. Bottom line is if the whole balance sheet adds up then your little neighbourhood nation example can get along just fine!


Interesting - so currently the average mortgage in Australia is about $280k according to RBA figures. The average household disposable income is something around $80k, which gives an "average" ratio of 3.5. Even using the average full time wage (which according to ABS is currently $65k) gives 4.3.

Doesn't seem like Australia is in any great danger with average income/debt ratio's square in this "sustainable" range?

PS: I agree with that range as guideline as well for what it's worth, and have never personally borrowed outside that range myself in the past. Remember that FHBs in the first 2-3 years of home ownership are the ones likely to be the most "leveraged" with respect to housing debt, but that group only ever represents a small proportion of total home owners at any one time (would be in the order of 2-3% of total property owners, ie, ~200k-300k out of 8.8M dwellings).

Cheers,

Beej
 
hello,

thanks to beej,

so at average mortgage of 280k, average income of 65k , and as most inform us here at ASF people have huge LVR's (and no savings) then the house price may of been 310-320k

so wage to price of 4-5, gee i am so relieved that we are at historical average, the birth right

its all in order

thankyou
robots
 

hello,

above research basically bangs the nail in the coffin for a lot of the carry on regarding people owning property,

is the tall poppy syndrome the last remaining item for people carrying on about people who own property/and do well with property?

any thoughts

thankyou
robots
 
robots said:
hello,

gee i am so relieved that we are at historical average
Click to expand...

Be careful of averages. On average each family has 2.3 children. So, what? Every family has one girl, one boy and a 13 week old foetus in the freezer? pffft!

Likewise with property. There will be a substantial number of people with ratios well below the average. There will also be a substantial number with ratios well above the average. In fact average ratios at those figures shows conclusively that many have very high levels of debt.

Prices are set at the margins, so there is reason for concern about gearing levels. I'm not a bear atm for the reasons set out earlier in this thread, but still have an eye on such things.
 
robots said:
hello,

is the tall poppy syndrome the last remaining item for people carrying on about people who own property/and do well with property?

any thoughts

thankyou
robots
Click to expand...

I've heard it all now. Read the title of the thread, that's what people are discussing and I see no tall poppy syndrome.

Just discussion of the various aspects that could affect the future of property prices in Australia including debt ratios to income.

Cheers
 
hello,

i have heard it all for the past five years, been great reading

hope the prophecies continue

thankyou
robots
 

Agree. People should respect each others opinions (if expressed with courtesy and containing some overriding logic) whether they agree or not. Economies and house prices are part of a chaotic system. Nobody knows the future and anything can happen.

But because of the way our monetary system is constructed (i.e. intentional inflation and debasement of fiat), the bulls will be right most of the time.

What is amusing is that someone with one or two suburban piles considers themselves a tall poppy.
 
I've had a strong dislike for that "disposable income" term ever since I realised how qutie a few Gen Y's interpret it.

In short, it's taken to mean "money to throw away" or in other words, what your left with after essentials (housing, basic food etc) and the idea being that you should spend the lot - hence the term "disposable", as in "to get rid of it".

The notion of saving or even making additional payments on a mortgage seems to be somewhat out of fashion - better to throw it away on junk it seems. And with that "disposable income" term so widely used, it seems that quite a few think that's what everyone, or at least the majority, does.

The cynic in me thinks the media, government etc are well aware of this and use the term as a subtle means of encouraging consumer spending. It's a somewhat obscure term after all.

It didn't worry me until I realised it was more than one individual thinking this way and is somewhat common.
 

Good to see your keeping it touch with your sensitive, feminine side.
 

hello,

yeah i agree brother,

perhaps some should go over to GHPC and re-read some of the responses the minute someone declared they owned a property or 2 or 3 or 4, tall poppy alright

very very amusing,

oh yeah, paradise here man

walk tall brother, enjoy the day

thankyou
robots
 
robots said:
is the tall poppy syndrome the last remaining item for people carrying on about people who own property/and do well with property?

any thoughts
Click to expand...

Hi robots,

No tall poppy syndrome here, I too own my piece of the aussie dream but I am very skeptical of a continuing boom.

The so called housing shortage seems like a load of baloney, it's a developers paradise around Melbourne at the moment, you just gotta open your eyes. High rise developments going up left right and center, it's like there's a scramble to get projects built before inevitable occurs.

Anyway I'm no guru, just putting 2 and 2 together.

Good luck with it all bro.
 
robots said:
perhaps some should go over to GHPC and re-read some of the responses the minute someone declared they owned a property or 2 or 3 or 4, tall poppy alright
Click to expand...

What has GHPC got to do with the price of eggs?
 
You must log in or register to reply here.

Similar threads

3
Future of $100,000 overland tourer Aussie lifestyle and the EV era
2
Replies
21
Views
2K
qldfrog
A
The future of Astraya
2 3
Replies
45
Views
8K
SirRumpole
Ultimate Acronym List (UAL)
Replies
0
Views
5K
Dividend
A
Factors affecting property prices
Replies
3
Views
11K
Space Invader101
Australia's own Ponzi scheme: the property market
Replies
4
Views
5K
Glen48
Menu
Log in
Register
Cookies are required to use this site. You must accept them to continue using the site. Learn more...