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Will buy again in Adelaide before I think the next cyclical upswing will start. IMO I've still got a year or two. Sold out at the last cyclical peak. Both Sydney and Perth saw 5-6 year periods of nominal price stagnation before next leg up. Expecting similar in Adelaide and it's been around...

You are basically measuring from the end of the rise that took prices to a "structurally" higher level relative to incomes, GDP, rent, etc. So yes it could be argued you've measured from an unfair point in time (even if that wasn't your intention). Perhaps prices don't correct to a...

Did you get paid to make that post Deltaberry or are you just a hypocrite? :confused: :D

I don't think a return to 3.0 is likely (as a long term average), though it could head that low in a severe correction. Interest rates aren't the only influence that has allowed prices to keep swinging to the top of the 4.0-4.5 band, it's been a combination of factors including a prosperous...

So are you saying there's no market proof that low rates forever is a "safe assumption" as you previously implied? I think to budget for reversion to 10 year average mortgage rate (circa 7%?) and then add 2% buffer on top would be reducing risk to a reasonable level. Either that or lock in...

Because that's not what a majority of people in Australia do (fix rates long term). How accurate has "the market" been when looking out 2-3 years at interest rates? From my anecdotal observations, not very. If you have a measure that shows the markets medium - long term view on interest rates...

They don't look at affordability, they look at serviceability. That's why they use serviceability calculators. Serviceability ≠ affordability. Might want to redo the math on that.

I don't have a one track mind. Some cities are more overvalued/undervalued than others. Have owned property, will buy again.

I have a problem measuring affordability using a snapshot in time or making assumptions such as rates will always stay low, incomes will increase at the rate they have in the past, etc. Here are two definitions of 'afford': 1. Afford: To have the financial means for; bear the cost of. 2...

Clearly. Serviceability ≠ affordability. Pointing at higher prices/lower rates and saying housing is affordable because the debt can be serviced is a farce when the total repaid & risk are both substantially higher (with the house price to income ratio having doubled). An environment with...

So replace example with 4.5% & 9%. The point is that lower rates/higher prices relative to income doesn't make it more affordable. How many borrowers take out 10-15 year fixed rates? I think I saw a stat the other day that puts 85% of borrowers on variable. You talk about incomes...

Just because something can be serviced with the same initial payments doesn't mean that it's equally as affordable. $300,000 borrowed @ 6% Repayments of $2000 per month 23 years, 2 months to payoff loan Total repayments = $555,903 $150,000 borrowed @ 12% Repayments of $2000 per month...

So the sustainability of a long term commitment should be measured on the basis of whatever interest rates are right at this moment?