Compound growth in house prices over ?

[buggerlugs]

http://www.news.com.au/money/money-m...-1226395093277
Interesting comments by the Boss of Westpac......

[karj]

The housing boom was always a double edged sword. It benefitted those who were already financially established and allowed them to grow their wealth whilst freezing out new homeowners and pushing house prices through the roof. If it is over, it's a good thing.

[Jim Goose]

Have to agree... if its over ... good!

Its everyones right to be able to own a home, however in the past 7 or 8yrs its become just a pipe dream for some to be able to;
a) afford to buy one...
b) be able to actually pay it off

[MAD]

It won't be over. Maybe not to the levels as before, but it will still exist.

It has stopped over the past 1-2 years (depending who you ask), but as long as there are incentives to invest in property (tax offsets as generous as they are) there will always be someone with more coin than you possibly vying for the same property.

I think people have realised that the "value" they are placing on property is well above its true value.

[drwevil]

Man I'm glad I have a cheap mortgage.

My wife can stay home, we are comfortable, well fed and have a nice car and a hack ..;-)

Our house isnt the biggest or the best but it's home and we can afford it ..

Unlike some of our friends who both work , have nice houses, nice cars, drop the kids at day care or school and have HUGE mortgage and are miserable...the reality of the Aussie dream....

[buggerlugs]

Originally Posted by drwevil

Man I'm glad I have a cheap mortgage.

My wife can stay home, we are comfortable, well fed and have a nice car and a hack ..;-)

Our house isnt the biggest or the best but it's home and we can afford it ..

Unlike some of our friends who both work , have nice houses, nice cars, drop the kids at day care or school and have HUGE mortgage and are miserable...the reality of the Aussie dream....

It's called living within your means. Well done. Australian Crawl had a song called "Live now, Pay later". Sums up a lot of Australia.......

[Jim Goose]

Originally Posted by buggerlugs

It's called living within your means. Well done. Australian Crawl had a song called "Live now, Pay later". Sums up a lot of Australia.......

Exactly.... a LOT of Australians (without causing a stir), especially those in the mining boom, who make a $100,000 a year, seem to be all whinging they cant afford to live... "really" I say in reply??

I wonder why?

3 or 4 cars, a jetski, a boat, two trail bikes, 5bedroom home in the most expensive part of town, a plasma in every room..... hmmmm

[Polyal]

I was talking to someone who is pretty clue'y about the economy and investing, his retired so its what he does..hehe

Anyway, he mentioned that Australia has the highest housing debt (cant remember if thats the correct term) in the world..anyone know which set of figures represents that?

From a young person who was in the market, and got out and now is going back in it is a bit of a joke. We brought such a nice house in Launceston for what you couldnt even buy a 1 bedroom apartment/town house for in Vic.

I think one of the issues is that outer suburbs are just hard to get to..I mean I live 40mins NW of Melb and on a good day I can drive straight into the CBD of melb in under 40mins. Problem is that quickly turns to 1.5hrs if the traffic is stuffed.

Ive never heard anyone in mining say that cant afford to live though.

[XB GS 351 Coupe]

House values have been going up at a steady rate since the early 1900's, the rate of increase of value of homes has been consistent for the last 50-60 years, ie the percentage gain of value has not changed over that period when averaged out in the long term.

Obviously ignoring booms like we had in the early 2000's and recessions like in the mid to late 80's, these booms and recessions have since evened out, remembering the housing market is a LONG TERM investment not a point in time.

Re affordability, I believe housing is more affordable these days, people are just expecting more, my parents bought a house in the early 80's for 60K, 1/4 acre block, three bedroom no garage, no air con, fairly small compared to the 4-5 bedroom walk in wardrobes, ensuite, three car garage, ducted air and heating people expect as a first home today.

If new home buyers bought/build small 3 bedroom homes similar to what I have grown up in they could easily afford it.

[Dr Jekkyl]

The most recent housing boom will not be repeated for a long, long time!

Favourable demographics, easy credit availability and govt. policy created a huge asset bubble that is now finally starting to deflate.

Australian household debt is 150% of GDP!

This hardly sustainable and anyone who actually thought it could go on forever was, and still is, deluded.

The property sector does bring in considerable revenue for state govts so I am sure that we will see plenty of attempts at re-inflating the bubble, just like NSW recently announced.

[sneaky]

hopefully this doesn't mean house prices drop too much. i have a nice(ish) house and two nice cars (i just bought my SS after waiting over 10 years to get one).

i would like to move closer to newcastle (currently on the central coast) but just can't afford it.. to buy a house similar to ours in the area we want we have to fork out an extra $150k+. for the money i could sell my house for i could buy an older house that needs work done (and i work 6 days a week to pay for the house so no time to renovate).

anyway, just have to wait and see what the market does

[flappist]

Whether you own your house outright or are makeing payments you are just a temporary visitor.

Dead people do not care if they have $1,000,000 in the bank or are in debtor for $1,000,000..........

[MAD]

Originally Posted by flappist

Whether you own your house outright or are makeing payments you are just a temporary visitor.

Dead people do not care if they have $1,000,000 in the bank or are in debtor for $1,000,000..........

You don't think the person in debt might care that they'll be passing that burden on to their family?

[usernametaken]

We saved and saved while other borrowed and borrowed.

We now have a house that was half payed for in cash and an easy mortgage of 1000 a month, while the others are sweating each repayment and doing the sums on selling their brand new Audi/BMW (to me hopefully at a nicely deflated price)



reminds me of the tortoise and the hare...

[usernametaken]

sorry, just read my post. I sound like a ****** above.

I don't wish for anyone to be in mortgage stress.

[flappist]

Originally Posted by MAD

You don't think the person in debt might care that they'll be passing that burden on to their family?

What burden?

The family do not have to pay anything unless they want to keep whatever has money owed on it.

If it is the house they are living in then it is their turn to pay or do you expect to get everything for free and let someone else pay for it.......

Or they could sell or even walk away from the house and live "within their means" in a shoebox in the middle of the road. Their choice.

[MAD]

Well in your example above, there are two very different outcomes when the person dies.
1) the family can sell the house to share the inheritance
2) the family can sell the house to clear the debt

I wonder which the dead person might have preferred.

[karj]

Originally Posted by flappist

Whether you own your house outright or are makeing payments you are just a temporary visitor.

Dead people do not care if they have $1,000,000 in the bank or are in debtor for $1,000,000..........

The dead might not care, but the living certainly do... or at least they should care.

Especially as you get older and less employable, the security of owning your house and the knowledge that if you are unlucky enough to find yourself out of work, at least you wont lose your house is a great comfort.

Not having to make huge loan repayments also frees up a significant portion of income, allowing for greater financial freedom and better resultant mental health. The sad reality is that many Australians are just a paycheck or 2 from defaulting on their loans. Have you seen some peoples minimum monthly repayments

If the GFC had hit hard in Australia... this country would have been so far up the proverbial creek.

[flappist]

Originally Posted by MAD

Well in your example above, there are two very different outcomes when the person dies.
1) the family can sell the house to share the inheritance
2) the family can sell the house to clear the debt

I wonder which the dead person might have preferred.

Well lets see.

Did the family enjoy all the advantages gained by this debt?

If so then it is now their problem and they can continue to enjoy the advantages but now thay have to pay for them.

If not then they have nothing to lose......well except for not gaining a windfall to which they did not contribute. So they sell the house and buy a shoebox in the middle of the road.


The botton line is, live your life how you wish to and stop trying to tell everyone else how to live theirs.......

[MAD]

Originally Posted by flappist

Well lets see.

Did the family enjoy all the advantages gained by this debt?

If so then it is now their problem and they can continue to enjoy the advantages but now thay have to pay for them.

If not then they have nothing to lose......well except for not gaining a windfall to which they did not contribute. So they sell the house and buy a shoebox in the middle of the road.


The botton line is, live your life how you wish to and stop trying to tell everyone else how to live theirs.......

Why go off on tangents when someone disputes your claim?
You said the dead wouldn't care, I'm saying they would.
It's not about what the surviving family do with it, or how they choose to view life, or whether they're spoilt brats, your examples are in the hands of the owner.

Simple fact is, of your two examples, I'm sure the owner would prefer to leave the family some money rather than the resposibility to sell and clear the debt. You may be surprised to learn this, but some people do actually have a heart and care about their family.


You could learn a thing or two by listening to your own advice in that last line.

[Road_Warrior]

Originally Posted by XB GS 351 Coupe

Re affordability, I believe housing is more affordable these days, people are just expecting more, my parents bought a house in the early 80's for 60K, 1/4 acre block, three bedroom no garage, no air con, fairly small compared to the 4-5 bedroom walk in wardrobes, ensuite, three car garage, ducted air and heating people expect as a first home today.

If new home buyers bought/build small 3 bedroom homes similar to what I have grown up in they could easily afford it.

This is something I have marvelled at as well. My first house (which we're still in I might add, but we're currently in the process of tarting it up to sell and move into something bigger and better) is a 45 year old 3 bedroom duplex half. Now, being in Perth, we're acutely aware of the impact the housing boom has had on affordability but some people simply won't consider something older and more modest and everything has to be bells and whistles type stuff, and then complain about affordability.

Silly cow in my office has been crapping on about buying a house for 3 years. She's one of these loud talkers on the phone who makes sure everyone knows she and her partner are looking at (or WERE looking at) 5, 6 and 700,000 dollar houses (for their FIRST home). But guess what, 3 years on, they're still renting, but won't accept advice about maybe scaling back their expectations so they can get their foot in the door with something cheaper.

You can lead a horse to water, but you can't make it drink.

[flappist]

Originally Posted by MAD

You could learn a thing or two by listening to your own advice in that last line.

My view is now and has always been:

You are responsible for your life not everyone else's.
As you do not like to be told what to do neither do others although there seem to be many who take delight in trying to control what other do or think.

I put forward my ideas and you can chose to agree or disagree with them, I really don't care in most cases.

I just get annoyed at those who want everyone else to solve their problems, blame everyone else for anything that happens and most importantly believe that anyone who does not think like they do or follow their standards should be forced to comply.

But back on to the original topic, I disagree. Most of us want to improve ourselves and tend to buy better. Just look at how many one here have bought a new XT as opposed to XR6/G6/G6E all of which are basically the same thing but cost more.

I am just about to buy another rental property as prices are good at the moment although they are starting to rise again here.

Yes it will be a debt but it will pay for itself and in the end EVERYTHING goes up in price.

(and before someome cites electronics as getting cheaper, they aren't, only the older technology stuff is cheap, if you want ACTUAL leading edge technology it is still VERY expensive)

[MAD]

Originally Posted by flappist

My view is now and has always been:

You are responsible for your life not everyone else's.
As you do not like to be told what to do neither do others although there seem to be many who take delight in trying to control what other do or think.

Who said anythig about being responsible for others? My comments are based around consideration for others, not their responsibility.

I never told anyone to do anything, so I don't know what you're getting at there.

I put forward my ideas and you can chose to agree or disagree with them, I really don't care in most cases.

It certainly seems like you care this time because I put up a contrary view and you jumped at the opportunity to expand from your original comment to try and make my view come across as wrong.

I just get annoyed at those who want everyone else to solve their problems, blame everyone else for anything that happens and most importantly believe that anyone who does not think like they do or follow their standards should be forced to comply.

Again, I think you need to take some of your own advice.
I'm sure there's a lot of people on here that don't like being told that their opinion is wrong, and that everything should be done your way.

[flappist]

Originally Posted by MAD

Who said anythig about being responsible for others? My comments are based around consideration for others, not their responsibility.

I never told anyone to do anything, so I don't know what you're getting at there.

It certainly seems like you care this time because I put up a contrary view and you jumped at the opportunity to expand from your original comment to try and make my view come across as wrong.

Again, I think you need to take some of your own advice.
I'm sure there's a lot of people on here that don't like being told that their opinion is wrong, and that everything should be done your way.

There is a HUGE difference between telling you that you are wrong and you should do it my way and FORCING you to do it my way.

[AU101]

Lets all settle down, we don't want another MOD shutting down another thread

[Keepleft]

Originally Posted by karj

If the GFC had hit hard in Australia... this country would have been so far up the proverbial creek.

GFC was nothing, patience please......

[MITCHAY]

It's funny this comes up because I was just talking about it on another forum.

I was saying as the older people start to retire (excluding those in CSS fund which most would be laughing) prices should come down because they need the money and probably have to sell investment properties and/or downsize their own home. We may see demand at the worst meeting supply.

Most soon to be retirees would have been far behind in super to begin with and then they are exposed to the share market which is taking a flogging at the moment unless they changed their investment strategies.

[karj]

Originally Posted by Keepleft

GFC was nothing, patience please......

You've got me a bit confused with that... are you making a joke that I'm just too thick to understand, or are you serious?

The GFC was an unmitigated disaster. Australia got through it relatively unscathed largely because of the structure of our economy, the surplus from the previous government and good government policy/stimulus (guaranteeing deposits in financial institutions, etc).

[Franco Cozzo]

You could probably lead a life on minimum wage without issue, it all comes down to living within your means, you want a lavish lifestyle you're going to have to work your *** off for it.

I own my three cars outright, I've paid for since having a job since 15, and two jobs since I was 18. I've got no debt, no finance, no credit cards, but I live with my parents so I have it pretty damn good.

I was saving up for a property, but I'm going to blow all my savings on another new car when I'm off my Ps in 2014, just one last time before I have to get serious .

I want to be in my own house by the time im 25.

[MITCHAY]

Originally Posted by karj

You've got me a bit confused with that... are you making a joke that I'm just too thick to understand, or are you serious?

The GFC was an unmitigated disaster. Australia got through it relatively unscathed largely because of the structure of our economy, the surplus from the previous government and good government policy/stimulus (guaranteeing deposits in financial institutions, etc).

I took it as that the GFC was nothing compared to what will come.