Adelaide broke the $100,000 mark

Xenia

Xenia

OK revealing my age here, but I was a very very very YOUNG (very young) property investor in the 1990s when Adelaide house prices broke the $100,000 mark.

I think I had 2 - 3 investment properties at the time that were purchased at about $95 to $120,000. Now what is interesting is remembering the comments from the general public and the media at the time.

NO ONE can afford real estate anymore. It's too over priced.
Home buyers are not given a chance.
We have reached a limit, a bubble and prices cannot possibly go up further.

My accountant at the time even gave me instructions to not buy any more property as it cannot possibly go up further.

then off course there was a boom ...... markets went up, markets went down but would $100,000 prices ever be repeated. Not Likely.

My prediction is that the average property in Adelaide (and everywhere else) will be over $1 mil by the end of this decade. Agree or disagree?
 
Xenia said:
My prediction is that the average property in Adelaide (and everywhere else) will be over $1 mil by the end of this decade. Agree or disagree?
Click to expand...

And most probably it'll be still unaffordable because the average wages will be around $200,000 :eek:

What were the average wages at the time the $100,000 mark was reached?
 
The "median" wage around 1990-1992 was around $33k.

You bring up a good point currently the median price in Adelaide is $390k....lets assume a lower than average growth over the next 9 years to 2020 based on 5% growth per annum the average price of house in 2020 will be $634k.

If the normal 7.2% growth (based on the last 100 years) trajectory is achieved then the median prce will be $741k.

In terms of wages assuming 4% per annum growth....the current median of $66k will be $99k.

Based on $66k median wage todays price of housing is 5.9 times wages. In 2020 assuming 99k wage and $643k median (used longer growth figure)...it will be 6.5 times wages.

Interesting isn't it?? ;)

agent007 said:
And most probably it'll be still unaffordable because the average wages will be around $200,000 :eek:

What were the average wages at the time the $100,000 mark was reached?
Click to expand...
 
another factor is that the middle class sector is diminishing as people move to either the rich or poor end.

More people are turning to self education to provide income and financial security rather than relying on traditional jobs. This could have a huge bearing on the market.
 
Xenia said:
OK revealing my age here, but I was a very very very YOUNG (very young) property investor in the 1990s when Adelaide house prices broke the $100,000 mark.

I think I had 2 - 3 investment properties at the time that were purchased at about $95 to $120,000. Now what is interesting is remembering the comments from the general public and the media at the time.

NO ONE can afford real estate anymore. It's too over priced.
Home buyers are not given a chance.
We have reached a limit, a bubble and prices cannot possibly go up further.

My accountant at the time even gave me instructions to not buy any more property as it cannot possibly go up further.

then off course there was a boom ...... markets went up, markets went down but would $100,000 prices ever be repeated. Not Likely.

My prediction is that the average property in Adelaide (and everywhere else) will be over $1 mil by the end of this decade. Agree or disagree?
Click to expand...


Due to the influx of investors ( tax advantage, negative gearing...) Home buyers are force to pay a premium for the limited of stock available ( high demand/developed areas) :rolleyes:

So property price will continue to boom due to demand- especially areas next to work hub, shopping center, major transport, hospital and attraction.:cool:

Regards
Michael
 
Xenia said:
Now what is interesting is remembering the comments from the general public and the media at the time.
NO ONE can afford real estate anymore. It's too over priced.
Home buyers are not given a chance.
We have reached a limit, a bubble and prices cannot possibly go up further.
Click to expand...
Did they provide any justification for these opinions or was it just drivel like most mainstream media reports on property?

What were gross rents like at the time?
What were prices like as a multiple of household income?
What percentage of household disposable income were interest repayments?

Xenia said:
My prediction is that the average property in Adelaide (and everywhere else) will be over $1 mil by the end of this decade. Agree or disagree?
Click to expand...
Disagree.
Or as mentioned above it will depend on inflation and income growth.
Put it this way, I don't think property will be a higher multiple of incomes than it is today by the end of the decade.
 
True story

One of my workers many years back had the choice to buy
A# sidchrome tool box $200 ( i think pound could be dollars)
B# Block of land. Same price :eek::eek:

He picked the tool box:rolleyes:

Today he still has the tool box

Tool box value $20
Land value $160,000

no real point to make. just funny i think.

As far as reaching the 1 million mark. I think it will be a big push. maybe at the peak of another boom but i would think it to be past this decade.

Property will continue to double but the average 7-10 year period currrently enjoyed will stretch out each cycle.
Interest rate cycles will also become less extreme as debt increase.
What will happen in the end when rates flatline and cycles become to long. Who knows but i believe there will be many more cycles before we have to worry about it.
 
devo76 said:
True story

One of my workers many years back had the choice to buy
A# sidchrome tool box $200 ( i think pound could be dollars)
B# Block of land. Same price :eek::eek:

He picked the tool box:rolleyes:

Today he still has the tool box

Tool box value $20
Land value $160,000

no real point to make. just funny i think.

As far as reaching the 1 million mark. I think it will be a big push. maybe at the peak of another boom but i would think it to be past this decade.

Property will continue to double but the average 7-10 year period currrently enjoyed will stretch out each cycle.
Interest rate cycles will also become less extreme as debt increase.
What will happen in the end when rates flatline and cycles become to long. Who knows but i believe there will be many more cycles before we have to worry about it.
Click to expand...



Poor guy! :D
I would have just bought both.
 
Xenia:
My accountant at the time even gave me instructions to not buy any more property as it cannot possibly go up further.
Click to expand...

....as did mine, (accountant). I understand her 'well meant intention' of watching my back, but the end result is I am quite the autonomous, determined person I am, had researched and bought well, recognised there were/are still many good buying/deal opportunities and she has sinced apologised and thanked me for taking her on a jouney into unfamiliar territory of investing too. She is now investing in property with a passion.:p

Who would have ever thought my headstrong protective accountant would learn from a headstrong, determined investor. This is all fun.
 
hobo-jo said:
Did they provide any justification for these opinions or was it just drivel like most mainstream media reports on property?

What were gross rents like at the time?
What were prices like as a multiple of household income?
What percentage of household disposable income were interest repayments?


Disagree.
Or as mentioned above it will depend on inflation and income growth.
Put it this way, I don't think property will be a higher multiple of incomes than it is today by the end of the decade.
Click to expand...

i wanted to issue a kudos, but i have to spread the love around more.

The sad thing for the doom and glommers out there, its not the 'old hand' residential investors that are going to get burnt (at least from looking at the members on this board). Its the new commers.
 
our obsession said:
Xenia:

she has sinced apologised and thanked me for taking her on a jouney into unfamiliar territory of investing too. She is now investing in property with a passion.:p

Who would have ever thought my headstrong protective accountant would learn from a headstrong, determined investor. This is all fun.
Click to expand...

Did you charge your accountant or did she stop charging you? :cool:
 
If wage growth continues, yes, obviously they'll hit a million at somepoint.

The reason houses are called expensive these days is because they're expensive relative to wages which have grown at a lower rate or have not grown at all for large portions of the population.

The while the AVERAGE could still be a million. I doubt most houses will grow at this rate if wages do not follow.
 
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