Neither was I until I tried itI'm still not convinced.
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.The real term problem that I see is long term affordability: If prices do increase ahead of wages by the sort of rates that are being discussed then, very roughly, your grandparents could (for the same, equivalent wage) afford four times as much house as you; your parents could afford twice as much; and your children (if you have any) will be able to afford half as much.
Adding new cheap houses to the statistical population of a city means that the kids will be able to afford them. Their house will be half as good locationwise as their parents was. That's the downside of being born to later than them. If the population stopped growing, there'd be no need for extra houses, no new houses would be built in cheap locations, and the average growth rate of a city would slow. Population growth drives house price growth.Yes, I'm aware that moving further out from the CBD will offset some of this, but the question remains: Who is going to be able to afford to pay for the substantial amount of expensive housing stock?
Conversely the upside of being born before the next generation is that your house will automatically improve locationwise (without actually moving ). More houses will be built further out in poorer locations, so yours will become more desirable to more people. That's what happened to granny who bought in the boondocks 65 yrs ago .
I agree absolutely with that statement. However, I think there will be lots of buyers who can afford high prices.... because they've saved & invested for a lifetime & they're genetically programmed for the Great Aussie Dream of home ownership.The reason that I'm making this point is that if there are few buyers who can afford high prices then they cannot be supported at this point.
IIRC, after the recent shock more people are paying down their mortgages faster. Maybe it'll last... dunno ? Maybe they'll suddenly realise that their mortgage is paid off, they have excess income and will want to upgrade ?KeithJ, your point about the average mortgage being paid off in seven years is interesting. I'm wondering how that'll change, given there was a big jump in prices in the late nineties / early noughties.