Well it does, your debt is automatically reduced in real terms
I think you just boggled my mind!
Never considered debt to be part of my 'riches', I suppose reducing it makes me less poor.
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Well it does, your debt is automatically reduced in real terms
The other day I paid $4.80 for a 600ml 'buddy' size Coke from 7-eleven.
Great wages in Australia, but the cost of living is ridiculous. At this rate there will be two kinds of coke I can't afford instead of just the one.
Yes.My 2 cents worth.
"Property doubles every 10 year"
No. Property doubles on average, in 10 ten years. Some decades it does better, some worse. Over the long term, property outperforms inflation by 2%. Inflation has averaged 5.2% over the last 100 years and property has averaged 7.2%. Inflation has been lower than average over the past few years, so at some stage property will slow down too. This may or may not be in the next decade.
Try looking at newspapers from 100 years ago and compare prices with the same property now. It's amazing how consistent it all works out to be.
Nobody can see the future. All we have is the past history. It is up to us to make the educated guess about the future.but I don't see it in the future -
but I don't see it in the future - interest rates have nowhere to go but up .
I think you just boggled my mind!
Never considered debt to be part of my 'riches', I suppose reducing it makes me less poor.
ITs a new fad, using debt to create wealth, you should look into it
$8K to $1m in 47 years is 8.5% per year or doubling every 8.5 years on average. So, as others have noted, doubling every ten years in the long term has been a reasonable benchmark in the past but I don't see it in the future - interest rates have nowhere to go but up and the big boost of allowing two incomes when considering mortgage capacity won't happen again. That said, a lot of people who die off in the next decade or two will be leaving previously unimaginable sums to younger generations and these may flow back into the housing market.
Nobody can see the future. All we have is the past history. It is up to us to make the educated guess about the future.
Saying we are somewhat different is bit arrogant. In the absence of a crystal ball I would rather put more weight on the past patterns.
Say the median is currently 500k, following the rule, we'd have:
2024: 1 million median
2034: 2 million median
2044: 4 million median
2054: 8 million median
2064: 16 million median
2074: 32 million median
2084: 64 million median
2094: 128 million median
2104: 256 million median
2114: 512 million median
I'm sure you can see where this is going.
So either we have some spectacular inflation ahead of us or, no, property does not double every 10 years.
Over the last few decades property has been driven higher by:
- Looser lending standards
- Increase in dual income households
- Lower & lower interest rates
- Private debt expanding faster than the economy
- Strong income growth from a mining boom
We've probably taken prices about as far as they can go:
So no I don't think property will perform as well over coming decades as it has over the last few.
$8K to $1m in 47 years is 8.5% per year or doubling every 8.5 years on average. So, as others have noted, doubling every ten years in the long term has been a reasonable benchmark in the past but I don't see it in the future - interest rates have nowhere to go but up and the big boost of allowing two incomes when considering mortgage capacity won't happen again. That said, a lot of people who die off in the next decade or two will be leaving previously unimaginable sums to younger generations and these may flow back into the housing market.
Hi Shadow
Do you have a chart for the last 7 decades to post
We're just taking nominal figures here. A $512m median might sound crazy, but it's no more crazy than a $1m median would have sounded 100 years ago. Obviously a $512m median wouldn't be possible with current incomes, but if incomes also doubled every 10 years then it would be no less affordable than prices are today.
I guess the question is can incomes keep pace and it not, how much can the real price rise before its not sustainable?