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So basically your position is that prices are not relevant, rather the equity that has built over the boom is more so. Add in a few cheap comments about how 'It's different here' (highlighting environmental factors which were mostly the same in any previous overpriced/bubble western housing...

mmm humble pie, delicious. Actually I might eat that pie early. I read your post in tandem with that from The Fence and assumed you'd implied a doubling of house prices in 10 years as he did, but you haven't. So my apologies :) It depends on what was measured in Melbourne, but if you are...

I think you've framed it well. Enablers - Lower interest rates, decreased regulation (easier credit) Drivers - Tax advantages (Neg Gearing, 50% CGT disc), government grants, restrictive UGBs & land banking, low levels of construction, increase in dual income households and more recently...

You don't need to tell me. The chart (and two subsequent posts) was intended to parody what some on here believe with conviction, maybe you should tell them!

Of course compositional change happens. I'm just saying it's not the main driver of prices rising faster than incomes.

keithj, your whole "compositional change" red herring falls apart if you were to simply look at an area that's seen little change over the last 15-20 years and compare price to income ratios (local income to local prices) over time in that specific locale. I'd go to the trouble of documenting...

Right on keithj, which is why when average house prices are 1000x multiple of average incomes Sydney will probably have a 300km radius. First home buyers will just need to suck it up and spend 6 hours travelling each way to work from the mortgage belt. Just who do they think they are...

Of course not, how do you think the average house will reach a 1000x multiple of an average wage without other input?

Sure, but it's not likely we see a contribution from mining to economic growth like this again for some time... All you need is this one chart to map the future of house prices: http://aussiehouseprices.blogspot.com.ar/2011/02/never-ending-capital-growth.html And wage growth is already...

I see the Asian century as one where China's GDP exceeds that of America (adjusted for purchasing power that's reportedly occurred this year, but still a way off in real terms). With this will come a larger influence on the global economy, financial system, trade, etc. That doesn't mean that...

Some good points in your post, but you may want to take a look at how similar China's demographics are to Japan's from 25 years ago when starting their economic funk. Also if we are heading into the 'Asian Century' (undoubtedly we are, but that doesn't mean we can't have turbulent decades as...