melbournite wrote:
My two cents worth… whenever there is talk about whether Australian property prices are in a bubble, those with vested interests always say we are not in a bubble, so prices will just stagnate at worst (best?). If we are in a bubble though, a bubble by definition has to pop at some stage. The bubble should have burst years ago, and would have burst years ago if the government had not interfered and propped up the bubble, sending it ever higher. Whenever I talk to friends about the housing bubble here, they look at me as though I'm talking gibberish, or come up with all the usual reasons why prices will stay high e.g. increasing population, foreign buyers, increased demand, higher wages etc. The thing is, that anyone who bought in the last ten years or before, has done very well, better than they could ever have dreamed! However, for anyone wanting to get into the property market, if properties continue to double every seven to ten years, then the average price will be $1million dollars soon. That means that if someone can save a deposit of say, $100,000 then they would have to take out a mortgage of $900,000, plus costs! Are wages going to go that high in the next few years? OK, if you already have a property and sell it, then you could buy, with a much smaller mortgage. But what about the investors – to make it a worthwhile investment, rents would have to increase to levels which are unaffordable. But, if real estate doesn't go up, then what will be the incentive to buy once investors work out that they could get a much greater return elsewhere? So, it makes sense that this bubble has to burst. The government, of course will never touch on this. They may mouth about making housing affordable, but in order to do so, prices have to come down. If prices do come down, then perceived wealth falls, and then jobs have to be lost, leading us into recession, and of course no government wants to be one to cause or lead us into recession, and no home-owner wants to see the price of their real estate fall either. So it is in their interest to push up the bubble, whether it means opening the floodgates wider to foreign buyers, more immigrants, more grants etc. I might sound as though I'm contradicting myself somewhat, but what I'm saying is that we are obviously in a bubble, the bubble has to burst but the government will certainly try to do what they can to keep the bubble afloat for as long as possible.
Well… the problem is
60% of home loan held by only top 20% of income earners
The argument using median house price and median income… does NOT reflect the current market in Australia.
You could NOT stratified using the basic statistic… I think we need some education how to use statistic
