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Neither was I until I tried it :) Yep. That's the benefit my granny receives for a lifetime of wise investing in property & hard saving (paying down principle). Why should I or my kids have that benefit for no effort ? Time in the Market matters. Adding new cheap houses to the statistical...

Remember to add in the principle they are paying down... the average Australian home loan is paid off in 7 yrs. And remember that their wages have increased @ 4.5%pa, and their discretionary income has approx doubled. Here's a picture of a spreadsheet (using your assumptions), showing what...

Average people on average wages buying an average property also have an average deposit. The average FHB has only a 10-20% deposit. Upgraders who have been paying down principle for 10 yrs while their house value has doubled have a 50%+ deposit. The average new loan taken out is $270K. The...

I agree. Demographia has been rubbished here & elsewhere. I'm not sure you have responded to my point above about affordability having nothing to do with house price levels, but debt levels. The Demographia study produces some crazy results for the same reason. It ignores the 50% deposits...

Quite possibly. Video conferencing was supposed to be catalyst..... then high speed broadband. Neither have produced significant results AFAIK. I feel the problem is that managers feel the need to see bums on seats. Maybe permanent surveillance of the home office would satisfy them ? a...

The main reason to ignore the 400 yr mean is that today jobs are concentrated in the CBD, people are prepared to pay to be near their job. Until ~100 yrs ago most jobs were locally based - there was no need or desire for the majority to travel to the city daily. And Australia is more...

I'm happy to go along with all those assumptions except the last one. A city may do an average of 7%pa, but not every single house does exactly 7% - some do more, some do less, and lots of cheap houses are added to the statistical population around the edges. These cheap houses that FHB can...

Hi Andrew, I'm all in favour of mean reversion.... except for a couple of points. Which mean do we revert to ? The 400 yr mean ? the 50 yr mean ? the 20 yr mean ? I'd argue that the 400 yr mean is irrelevant because to much has changed over that period. The last 50 yrs has seen huge...

You'll see we had a thread about it in 2006... and others since. 400 yrs isn't a time frame I'm especially interested in.... 20-50yrs is. Too much is different now as opposed to 100 yrs ago, let alone 400 yrs. I feel the more recent past (20-50yrs?) should be weighted far more than 100+ yrs...

On average you may be right. But no-one every buys a city average, they buy specific houses in fixed locations that they can afford. In 10 years time, more houses will have been built. These new houses will be in poor locations ('cos all the good blocks have already been taken by existing...