income growth, house price growth, and affordability

[lowb]

Trying to get my head around this:

1) If the price of a house doubles every 10 years,

2) and average income doubles every 7 years (or however long),

3) won't affordability worsen and worsen as time go by?

*where affordability can be measured in terms of:
house price / yearly income

**Then, since there should be limits to affordability (people may, say, move to different countries -or stop buying), then would the doubling of house prices slow down?

That the demand for housing is much greater than supply is a great thing -however perhaps the question in hand is just how much money people who demand housing have...

Ta

 

[Mooze]

From what you've posted there - incomes are doubling faster than house prices though.
From what you've posted in 21 years time average incomes will have tripled, but house prices will only have doubled (and that's only on averages).

Its all fairly irrelevant given its working with averages and medians - very few people are average, and very few houses are spot on the median.

 

[Ausprop]

typically a median priced home tracks further from the GPO as the years go by, thus even tho a median priced house may be say 7 times median wages, a median home from 1950 would be a lot different to the median home of 2008 i.e. in 1950 it was probably 2kms from the city, now its probably 20kms

Also the doubles every 10 year thing is a marketing thing... the next 20 years or so may see little real growth in median prices. Tho building costs are rising so fast that the concept of a typical median home will need to change - not that that's a bad thing as demand is changing to smaller homes anyway