Just an observation, but there seems to be more houses in my area these days that are advertised as 'Price on Application'. Now I used to interpret this as 'You can't afford it so don't bother with this one', but I am seeing this on properties that I know would be in the lower end of the market (e.g. 2 bed villa units) so I am wondering if agents are doing this so as not to advertise that the market has dropped a bit? Just a thought...
[misleading linear scaled 130 years chart snipped]
The spike around 2010 was Rudd's FHOB bailout. Didn't last very long, and as has been pointed out GFC is far from over.
You do know that using a linear scale on a chart like that over a 130 year period is just a "bearish" confidence trick to make you think there is something particularly abnormal about price change magnitudes in recent times?
For example, the chart suggests that CPI adjusted prices have doubled in 12 years since 2000, however, did you notice that from about 1948 - about 1950 CPI adjusted prices increased by an even greater amount? In 1/3 of the time? They then "corrected" slightly, and continued onwards and upwards for decades more - but on this chart that little episode of history looks far less dramatic than the last 12 years doesn't it?
The other problem with this often trotted out chart is that it really is pointless looking at CPI adjusted house prices anyway - what we pay are nominal prices!
You cannot ignore the inflation when you have to stump up the cash, or better still when you sell and pocket the actual cash! Wages, income etc have grown far more than CPI over the past 130 years, and houses have changed a lot in that time as well - we have electricity, inside dunnies, A/C, and houses are generally far larger and accommodate less people on average now etc etc just to think of a few differences! Did you know that if you "deflated" current house prices to the CPI adjusted equivalent of 1920 prices that the average house price would be about $50k? Is that what an average house should cost nowadays? Is that a realistic expectation? Could you even build 1/3 of a modest modern house for $50k? Plus land cost of course!
If there is inflation of 100% in a year and house prices go up by 20%, I suppose you'd be jumping on the street claiming to be rich.
That never going to happen
with inflation paper money lose value not hard asset
so 100% inflation, your money in the bank disappear fast where as hard asset will just
sell for 100% more ...
so high inflation is renter worse nightmare ...
so high inflation is renter worse nightmare ... but not as angry as these American with comments
The renters will then be in the street as they are in America now.
There is not a thing misleading about that chart - you only think so as you disagree with the proven thesis of a housing bubble.
No, I think it's very dramatic. Australia underwent many changes after WW2. Public opinion changed. It was decided that in order to protect such a vast continent, we would require mass immigration.
I just cannot comprehend how stupid that is. Someone with less patience would stop reading right here and never respond to you again.
If there is inflation of 100% in a year and house prices go up by 20%, I suppose you'd be jumping on the street claiming to be rich.
First of all, wages have zero to do with house prices.
Second of all, the cost of construction has barely moved compared to the cost of land in real terms - and only so because of the commodity bubble in the recent decade and wage inflation caused by the housing bubble itself. The size and nature of the houses reflects the time we live in, and it has no impact on price whatsoever.
Just post the chart in logrithmic scale, it's not that hard. Not like the data changes.There is not a thing misleading about that chart - you only think so as you disagree with the proven thesis of a housing bubble.
Exactly. This is a point too often overlooked when considering inflation.The only one looking foolish right now is you. Try thinking a little harder, and you might actually get it. It's like this - even in your 100% inflation / 20% house price appreciation scenario, are you better off to have bought sooner or later? If a house today costs $500k and next year it costs $600k, should you have bought when it cost $500k or would you rather pay that + $100k a year later? It really doesn't matter if the price of banana's doubles - or even if your income doubled over that period! You would still have to find (or borrow) and pay an extra $100k a year later.
Exactly. This is a point too often overlooked when considering inflation.
Is that regarding price or the fact of all those empty new houses they have?
Chinese investors actually wont move anyone into the house to keep the 'new' tag. Once someone lives in it the price drops. Which is why you get suburbs of empty houses.
.....both property and interest rates will be lower this time next year......
I've noticed that too. I'm in the Eastern Suburbs of Sydney and POA/EOI used to be only for $10m+ properties but I'm noticing it for a lot of properties in the $2-3m mark. I've also noticed a massive increase in the number of for sale v auction.
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