Search results

I don't understand your Q. 'forever' isn't a time frame I'm interested in - 15 yrs is a far more interesting time frame & we have a guarantee of that. You're saying rates are unpredictable 2-3 years out, and you're also saying that you won't buy based on an assumption of rates not rising. So my...

As you consider rates to be unpredictable, then surely you will always consider housing to be to high risk ? Regardless of the fact that you are offered v. long term fixed IRs are at historic lows.:confused: When I asked when would you consider housing affordable ?, I was hoping for an answer...

I think that explains a lot of your issues. The markets v. strong view is that the new normal is low rates - that is a safe assumption. You can absolutely guarantee it when you fix for 15 yrs at 7%. Why aren't you also making that assumption ? If you can mitigate the rate risk, then would you...

So are you saying higher rates/lower prices make it more affordable ?:confused: Irrelevant. The point is that the market thinks that IRs for the next 10-15 yrs will average around 7%. The market thinks that your scenario is unlikely - IRs will NOT be rising 'only a couple' of %', while incomes...

The chart is correctly labeled as income/interest paid ratio ..... my post incorrectly called it interest paid/price.

Is it safe to conclude that you think ratios/charts that take into account only 2 of the 3 most significant variables are better than one that takes all 3 into account ? Did you miss the bit about 'new normal' and low interest rates for the foreseeable future ? 10/15yr fixed rates of <7% ...

The price/rent & price/income ratios don't take the biggest expense into account, so the income/interest paid ratio is an improvement over those measures. The RBA/Commsec chart I referred to shows Income /Interest Paid is v. close the middle of the 6x to 13x range of the last 25 yrs. OTOH...

This chart of ratio of house prices to interest payments is IMO a lot more relevant than price/income or price/rent ratios - neither of which take into account the most important factor of the house purchase equation.