Excellant article of REAL housing growth and affordability, it may suprise you.

http://www.businessspectator.com.au...ket-cool-pd20100129-25VS7?OpenDocument&src=mp

I know we get articles listed all the time but I recommend reading this one.

It is one the best articles I have seen in a long, long time on the real growth or otherwise in housing, written in relatively plain English.

As a non-economist I liked how they pointed out that the RD Data hedonic index shows growth never really went backwards but also has not boomed, like median measures indicate. This made sense to my experiences as clearly overall prices never went 30% down and then 50% up like same say except in isolated sales.

It also claims with figures that prices are not unaffordable compared to income. Using the fact household income has increased and that wages is a poor measure.

Really worth a read, Peter 14.7:)
 
That article reads like an extended advert for the patented RP Data-Rismark National Capital City Hedonic Index. :)

One thing that puzzled me was Joye's assertion that incomes have kept pace with the growth in property prices, which were up nationally by 11.1% in 2009. I'd suggest that an increase of around 0.5 times (on a multiple of around 4) is a pretty big jump, so I'd like to know his methodology.

My guess is that he's including housing investments in the household income box. If that's the case then it skews the affordability somewhat as capital gains are counted as income. Shares too have had a good run, and that would help on the wider income measure.
 
It also claims with figures that prices are not unaffordable compared to income. Using the fact household income has increased and that wages is a poor measure.

Really worth a read, Peter 14.7:)

thx, will have a read tomorrow Peter.

but would dispute wages are a poor measure across time.

if it takes a dual income to keep a roof over one's head now, when it didn't 30 years ago, then how does the population reproduce itself?
and if it requires a dual income now, is it of concern that in the future a triple income will be required?


if a dual income is required now, then the hourly productivity of a worker has halved, in property terms.

I'd also argue the US Case Shiller index is more robust than RPData Rismark, because it tries to track repeat sales of the same property. But Australia may be too small a population to make it work.

 
thx, will have a read tomorrow Peter.

if it takes a dual income to keep a roof over one's head now, when it didn't 30 years ago, then how does the population reproduce itself?

Childcare.

As a dad of a 4 year old, I know in all but 1 one of our 12 friends with similar aged kids, the wife works. Some 2 days a week like my wife and some 5 days but all work for sanity and the income. In a years time Kids will all will be 5 and at school 5 days so I expect more of the part time will become full.

These are white collar professionals like 3 x Nurses, 1 Doctor, Paramedic, Admin Manager. The work shifts for the extra $ and to suit lifestyle. The days of wife at home with the kids are long gone unless you married a very high income hubbie.

My wife and I are spoilt having invested hard in the earlier years.

Peter
 
These are white collar professionals like 3 x Nurses, 1 Doctor, Paramedic, Admin Manager. The work shifts for the extra $ and to suit lifestyle. The days of wife at home with the kids are long gone unless you married a very high income hubbie.

not that I want to labor the point Pete, but there's a quantum leap from both working p/t or f/t because they WANT to, to HAS to.
 
Giday WW

You seem to think that women work for choice. A few do but most dont. In all the cases I know except my own wife, the wifes work because they have to, as well as want to. My wife works in our business so technically we could get someone else but we would never trust anyone else with the accounts. She has though knocked back full time work elsewhere.

You see few couples readily admit at the BBQ "yeah Kim only works because I (hubbie) as the provider dont earn enough to pay the bills".:eek:. It is always , she wants to keep her "hand in, skills, break from kids, etc.." always something more honourable than the mighty $.

Except one, she works crap hours in a very socially unacceptable job and is honest enough to say it. Hubbie wont even acknowledge her job. I admire her.

Yes, if we all went back to one income, prices would drop but that i\simply will not happen. Wife and I are anomaly becasue of our late age for kids and sucess in life. Most are 35 ish and mortgaged to the hilt.

Peter
 
Giday WW

You seem to think that women work for choice. A few do but most dont. In all the cases I know except my own wife, the wifes work because they have to, as well as want to.

I don't think most women work by choice.

Indeed, you should meet many of the 40yo+ nurses and personal carers I know who don't want to work, or would love the opportunity to retrain, or spend more time at home keeping their kids on the straight and narrow.....but they need the mulah for the mortgage and kids' education/bmx bike repair.

One of the issues contributed to by higher property prices is that many women are putting off kids until their mid 30s. What young female manual workers don't realize though, is that manual work beyond the age of 40 is fraught with adversities desk jobs aren't. As a rule, manual work becomes more difficult as one ages, because one's work capacity decreases due to back/knee pain and a general weakening and slowing of body function, no doubt accelerated by poor lifestyle choices and diet.

The same age issue afflicts male tradies. By the time they are 40, their work capacity has dropped significantly, and pity the ones that weren't savvy enough to accumulate some passive income and assets beforehand.

Current social morays are telling us we have more time for personal development, OS travel etc etc, before settling down to mortgage and kids. That may be true for a minority of office workers......but the people delivering that message aren't middle aged manual workers.
 
WW I agree with everything you say but the fact remains, people want bigger houses, thus they have to work. But you hit the point, I could go on and on but I can say wifey and I are the exception to our fellow parents because we:

married young 22
bought first PPOR young 22
bought affordable PPOR $72.5k
worked our arses off to pay mortage
have not travelled OS
invested in IPs
never had flash cars ( ok once)
and both never went to Uni.

If you go to Uni it is near impossible to do any of the above unitl you are 23+ and considering it takes 5 years to find partner and commit you are looking at 28 as the starting point. Which by coincidence it the average marrying age of Aus females in 2009.

Society has changed.

And Wife and I never planned kids or in our case, kid. We were card carrying DINKS until a night of too much champayne but an end to that!

Peter
 
If you go to Uni it is near impossible to do any of the above unitl you are 23+ and considering it takes 5 years to find partner and commit you are looking at 28 as the starting point. Which by coincidence it the average marrying age of Aus females in 2009

Being within this age group and having gone to uni, I can confirm that this is the case with almost all my peers. Those attending uni usually do until their mid twenties, and there is not much talk at all of marriage until late twenties, often early thirties. I'm off to a bucks this weekend for a guy I went to school with, and this will be the first one I've been to for someone of the same age as I.
 
WW I agree with everything you say but the fact remains, people want bigger houses, thus they have to work.

Pete, I think the bigger houses excuse is a furphy.

Look no further than the appreciation of terraces in Fitzroy, Melbourne.

They are still the same size they were in the 1800s, and many well over $600k haven't been renovated significantly since.
 
Pete, I think the bigger houses excuse is a furphy.

Look no further than the appreciation of terraces in Fitzroy, Melbourne.

They are still the same size they were in the 1800s, and many well over $600k haven't been renovated significantly since.

I think Peter means trophy houses with the associated condiments and high status artefacts.....mine's bigger than yours type ;)

Those terraces in Fitzroy (whilst having some heritage/federation or Victorian charm and scarcity value) are only three km or so to the CBD. Land is very expensive there.
 
Land is very expensive there.

Player, land is expensive in every capital city, especially on the fringes. Compare the growth rate of inner versus outer burbs over the last 7 years.

On the fringe, land is rising in price faster than wages too. Why so?

- higher developer contributions to local and state govt.
- land release not matching population growth.
- loose credit

In my experience, growth in build cost per m2 has been sub cpi.
 
Correct.

The mindset of many family buyers (not me) is the MC Mansion is the one for life. hence couples buy a 4 bed , DLUG, with 2 baths on the basis they will be having kids in 5 years or so. That is Mr and Mrs Average Project Home FHO.

The fact is overall houses have grown bigger as WW you point out. In 1890 a family lived in terraces in Fitzroy. Now family like in an average of 312m2 of house. It is not all about price. Cars means we can live further out and have more land. In 1980 you either walked or caught public transport.

If we stopped all growth in any Capital. Put a fence around it . It could only grow up and less m2 per block.

Peter
 
Player, land is expensive in every capital city, especially on the fringes. Compare the growth rate of inner versus outer burbs over the last 7 years.

On the fringe, land is rising in price faster than wages too. Why so?

- higher developer contributions to local and state govt.
- land release not matching population growth.

In my experience, growth in build cost per m2 has been sub cpi.

Why...Supply & Demand.

Most people want house and land. I know. I lived in a lovely inner city terrace 10 years. Friends would visit us from the burbs' and love the cafes and restaurants and activities but then say, we could never live HERE. Too crowded. Yet they craved the lifestyle? WHY?

Self confidence? Fear of supposed crime? Live where older family or friends are? To me living 13min walk form the office, 20 mins for the SCG, 2 min form best cafes, 20 min from Darling Harbour/Sydney harbour made sense????

But, I am not Joe average. We had only one car for god's sake:p Had no love of gardening, etc...

Peter
 
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