The Australian housing bubble furphy
- Thread starter ziggy2214
- Start date
Indeed. However, some overly enthusiastic investors seem to struggle with the concept of peaks.
You can't read this, but here goes.
How many investors are putting down a decent enough deposit to achieve CF+?
If property goes up, rents will not catch up even with rent rises. Both stagnation and rent rises are required to bridge the gap.
Yields are anything but decent and undersupply is not an issue in most cities. You're from Sydney, which I understand does have a genuine supply issue.
How many investors are putting down a decent enough deposit to achieve CF+?
If property goes up, rents will not catch up even with rent rises. Both stagnation and rent rises are required to bridge the gap.
Yields are anything but decent and undersupply is not an issue in most cities. You're from Sydney, which I understand does have a genuine supply issue.
it is an indicator of house prices compared to income.
WHAT THE **** IS SO HARD TO UNDERSTAND ABOUT THAT ?
Lol don't worry it's becomming increasingly clear it's a comprehension issue.
These are the people that will get burned in the current market (melb)... such is the nature of the beast.
Maybe look at it from the only angle you can,property has always been expensive in locations that every one else wants to live,was the same in 1983 when i started,is the same today only the media keeps everyone up too date on what's happening,and most who write in the papers don't have 20 cents in the back pocket or have to balls to take risks,after all anyone can complain on how bad their life is,property can drop 40%
2 we control have in a matter of hours after the Brisbane Floods ,2 years it will not matter,anyone who targets those floods area's over the next 16 weeks as a very high% will default on their loans in those area's once they all know that the so called insurance companies wipe them like a dunny rag..
How can someones opinion class them as a 'misguided soul' Michael.
is it because you dont like what they are saying? Is it because they have a different opinion to you?
What is the use of this forum if people with different opinions are treated like you treat those.
The answer probably explain why you have so many on ignore. Why cant you take these peoples opinions on board with out being offended (alarmed, moved to ignore them) so much?
is it because you dont like what they are saying? Is it because they have a different opinion to you?
What is the use of this forum if people with different opinions are treated like you treat those.
The answer probably explain why you have so many on ignore. Why cant you take these peoples opinions on board with out being offended (alarmed, moved to ignore them) so much?
I think the idea with this is to look a bit deeper to see if we can draw any conclusions based on how much money people *actually have available* to spend on property. This is quite different from simply how much people earn.
As has been discussed previously, incomes, tax rates, costs of other things have all changed over time. This distorts the amount available to support a mortgage, and thus reduces the usefulness of the measure. Disposable income attempts to remove some of this distortion.
We all know that property changes in terms of affordability over time. We had a long period where property got steadily cheaper in real terms, and then became steadily more expensive. This shouldn't come as a shock to anyone, and investors should know this.
Unfortunately, that makes it more difficult for some people to buy a house when prices are at or near their peak. Such people have options, including:
1) Buy a house anyway, and plan to keep it for a long period
2) Rent, and save/invest until prices are more affordable
3) Rent, but buy an investment property which they could potentially move into at a later stage.
Each option has risks, and benefits. The individual needs to choose which way to act, and why. Some options are better suited to some people than others.
It's easy to understand. That's why you understand it. But it doesn't MEAN anything.
It's a lazy stat used by tabloid newspapers to show how more expensive houses are compared to many years ago.
But it doesn't take into account increases in disposable income, increase in two income families, different houses being built, to name but a few.
That is what you cant comprehend Beepop, the reduced taxes you pay is what makes property affordable. if tax rates were 99% it would make sense to pay more for property. A 10% interest rate would effectively be 0.1, after tax deductions. plus depreciation which will more than cover rates and maintenance. Wow the property is positive geared before rental income, the rent is all profit. Think I could buy a few more. I am not paying tax and I also got tax free money by drawing on my increasing equity, in fact I increase my tax deductions the more equity I draw on.
Hi Evand,
My issue is that their opinions are unsustainable and argued as fact. I pointed this out in my post with references to the unsustainable blanket statements. If they were opinions based on some sort of sound reasoning then I would welcome the informed debate. But they're not, they're drivel and unbalanced. To be fair, if someone came on and said properties are going to boom next year by 40% because aliens will land and lay claim to all vacant land I'd probably put them on ignore too.
Cheers,
Michael
agree with u - the ones who normally get burnt don't do research, listening to hearsay or making assumptions abt places and others in denial phase.
omg.... it does MEAN something. maybe b.c it is not the ratio of disposable income to house prices is what it doesn't take those things into account
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why the hell would it account for different houses being built ? why would it care if the woman is working when it is not displosable household income ? do you know anything about statistics at all ?
how can it not? if we all build palaces the figure must be huge
how do statistics distort this? I don't get it
b.c it is not the multipier of income to cost of house per metre or multiplier of income to disposable household income, it is the multiper of income to house prices..
rent also depends on disposable income. ... lets sayin 33% of after tax income goes on rent
income = 100
price of property = 100
tax rate = 99% ur disposable income = $1.
rent = 33% of income = .33
7% interest = $7
net rental loss = 6.67
tax deduction = 6.603
.067 = net cost
for a 1 * income mulplier.
now make it 9.
income = 100
property = 900
tax rate = 99% ur disposable income = $1.
interest @ 7% = 63
rent = .33
net rental loss = 62.67
tax deduction = 62.0433
.627 = net cost
so the multiplier does matter
plus then you've got the non interest part of the payment.
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Once again you prove you have no understanding. Just because the tax rate is 99%. It does not mean that is how much tax you pay. Heard of Tax free threshold, tax brackets Building allowance and depreciation, FMDs, DPPs, supperannuation, LVRs, defered income, warehousing, EQUITY it is tax free at 99% tax rate great deduction. As you cant mount a sensible argument to justify your posistion, you have to resort to nonsense. Dont tell people who have done it, it cant be done. You can put brains in a pumpkin but you cant make them think.
but this can work in reverse as well.
Disposable incomes have risen very well over the last 15 years, but could this go into reverse now?
increased costs of electricity/gas/food prices.
significant tax cuts for the middle class is no longer happening.
carbon tax effect
if the resource boom slows down there will be budgetary pressures with further potential negative effects on disposable income.
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