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It doesn't actually. Have a read of post #16 in the Why does property go up in value? thread. It's pretty easy to see that discretionary income has been increasing at 7%pa for a while..... hmmmm just like property. I think you missed the point about inflation..... if inflation gives us 3% extra...

See the RBA link I posted above. That's my reality, and the RBAs, and those 100,000's FHBs. I guess you have a different reality ? We'll see. Please do. :confused: What will ?

Disagree. Inflation has averaged 3%, wage growth 4.5%, some of that additional disposable income goes towards higher house prices, some goes towards more consumer spending....it's a win-win.

No..... see the RBA charts in the above link. It's currrently ~4.8X. Yes.. as does the RBA.... as do the 100,000's of FHBs who recently bought. Why is the traditional Affordability Index correct ? Why shouldn't it change as circumstances change ? Why don't you consider the Debt/Income Ratio...

I rate the research from the RBA is little higher than Mr Maudlin :rolleyes:. Have a read of Background Notes for Opening Remarks to Senate Select Committee on Housing Affordability in Australia. And maybe the Housing affordability Part II thread.

My question is - Why is Price/Income a relevant ratio ? Surely Debt/Household Income is more relevant, and that's always been at reasonable levels. Price/Income is only relevant for those with no equity ie FHBs. Debt/Income is relevant to both FHBs and OOs who have equity. OOs have the...