The next 10 years: Prediction of the market

[see_change]

Although it might be a taboo subject here , lots of parents do help their kids get a foot in . Our parents helped us and we've helped our daughter . We matched what she saved .

Compared to the help that some people give it's minor .

What I don't like is the expectation of getting something for doing nothing .

Cliff

 

[ok180]

Changing demographics over the next 10-20 years will put pressure on governments as the aging population starts to show its true cost. Governments will be forced to reduce spending on the aged pension and health care. They will also be pressured to increase consumption taxes as well.

As baby boomers retire many of them will start to shed investment properties and downsize larger family homes in order fund their retirement.

This will put downwards price pressure on your more Blue chip suburbs (mainly inhabited by baby boomers) as there will be a glut of high end properties on the market.

The lower end of the market will remain flat, the middle will do ok as people looking to downsize will compete for modest/small homes in good areas.

So high value homes in the good suburbs will suffer, but everything else should do ok.

Increase immigration. Problem solved.

 

[ok180]

Is anyone else a bit concerned about how the future generation will be able to afford housing at the rate that house prices are going up? It's gotten to the point where the next IPs I purchase, I actually think of keeping/gifting for my future children as I just can't see how they'll be able to afford anything reasonable. I don't know if I'm just worrying needlessly though.

Yes, I am. I am happy at the moment as our portfolio is increasing in value month on month. That turns to worry though when I look at my 7 month old son and wonder how he is going to afford it one day.

I think in 20 or 30 years time the divide will get much larger than it is now between the haves and have nots. Hopefully we are on the side of the haves so we can help our kids out.

 

[Angel]

Is anyone else a bit concerned about how the future generation will be able to afford housing at the rate that house prices are going up? It's gotten to the point where the next IPs I purchase, I actually think of keeping/gifting for my future children as I just can't see how they'll be able to afford anything reasonable. I don't know if I'm just worrying needlessly though.

I heard that idea when I was just starting out when there was a boom in the very early 1980s. It happened again at the end of the 80s. Each time Sydney house prices were "unaffordable" those who wanted to get ahead relocated to Brisbane, Perth or Adelaide.

Of course you wont be asking your children to buy their first homes in (today's) million dollar suburbs, they can start off in affordable housing like you and I did.

 

[The Fence]

Of course you wont be asking your children to buy their first homes in (today's) million dollar suburbs, they can start off in affordable housing like you and I did.

And we go full circle on the affordability "issue".

We know what the real "issue" is.

Location location.

 

[Xjas]

Australia has an increasing population and a finite amount of land, so long as the population continues to increase the valve of land relative to the average income should continue to rise over the long term. Thats really just high school economics- supply and demand.
Add in the ever increasing regulations and red tape pushing up the cost of development and I think price rises over and above CPI are inevitable in the longer term.
The only thing that can prevent this would be deliberate and significant intervention by government.

 

[MTR]

Sorry I should have found both graphs . Economist 61% overpriced; Colliers 40-42% underpriced

What I was trying to say, all reputable sources show 2 totally separate things.

Economist reputable source?? Shame they seem to always get it wrong, perhaps too much time spent on charts and not enough time on the ground where all the action is

 

[Deltaberry]

Every generation has its challenges.

I'm from Gen Y and puke everytime I hear people complain how tough they have it. And just for the record apart from getting free board and education, I have never used a cent from my family's money ... yet. Quite the contrary in fact I spend more time helping them grow their income on their excess assets than I do growing mine, which I am happy to do because I hate under-utilisations.

 

[ok180]

Every generation has its challenges.

I'm from Gen Y and puke everytime I hear people complain how tough they have it. And just for the record apart from getting free board and education, I have never used a cent from my family's money ... yet. Quite the contrary in fact I spend more time helping them grow their income on their excess assets than I do growing mine, which I am happy to do because I hate under-utilisations.

You didnt need your parents money. You got something better - them raising you.

Brough up with the right mindset you dont need the money, that will come. Try getting that through to someone who comes from generation after generation of handouts though and the whole concept seems alien. Dont be hard on gen Y be hard on their parents and grand parents for never putting 2 and 2 together.

 

[impala67]

...You didnt need your parents money. You got something better - them raising you....

Well said. I was thinking the same thing, invaluable resource really.

...Brough up with the right mindset you dont need the money, that will come...the whole concept seems alien...

Totally agree. Of course there are exceptions as with everything.

A wealthy person's mentality is totally different to a poor person's mentality and most of our own ideas and thoughts growing up, and which we carry into adulthood, come from family and friends.

 

[coastymike]

We have quite a number of clients who have discussed structuring with us with the express purpose of the property being transferred to their children in future.

 

[DaveM]

Err no. I guess I have just been reading a few too many articles like this:
"Lawyer buys $710,000 city unit to set up son, 5, on ground floor of property market"
http://smh.domain.com.au/real-estat...-floor-of-property-market-20131028-2wc2p.html

I know a few people now who have bought a house shortly after their childs birth in a trust to rent out for the next 18-25 years and gift to them on their wedding gift etc so they can start adult life with a minimal to no mortgage

 

[luce.rocks]

I reckon growth petering out over the next 1-2 years then flat for 6-7 years, then slowly picking up for a year, then boom for 1-2. Then repeat.

 

[oc1]

Price growth will be highly correlated to how creative banks get with credit creation. They seem to get more and more creative which would lead you to believe the next major cycle will be bigger than the last.

Oscar

 

[trey]

Is anyone else a bit concerned about how the future generation will be able to afford housing at the rate that house prices are going up? It's gotten to the point where the next IPs I purchase, I actually think of keeping/gifting for my future children as I just can't see how they'll be able to afford anything reasonable. I don't know if I'm just worrying needlessly though.

unless you want to live 200kms west in the middle of nowhere the dream of home ownership for people who are now aged from 20 downwards is over. Its going to be very hard for the upcoming generations. ive saved 300k and im still not buying a house anytime soon because its stupidly overpriced to buy anywhere decent.

 

[trey]

300k is my total after tax salary of 8 years. And we have 4 houses.

well done!

im not looking to be in heaps of debt with IPs like everyone else. just want to pay for house outright and be done with it.

 

[Singo]

Oops sorry, I thought you have saved 300k and it is not enough for a deposit

If you want to own your house outright, buy two and wait for them to double. Then sell your PPOR (CGT free) and pay off the other and move into it!

 

[Richard Feynman]

Oh trey...

 

[trey]

Oops sorry, I thought you have saved 300k and it is not enough for a deposit

If you want to own your house outright, buy toe and wait for them to double. Then sell your PPOR (CGT free) and pay off the other and move into it!

yeah its not enough i need about 600k, which is a few years away! i might be whinging but it is going to be very tough for the younger generation. 90% of the people on this forum would be above 30 so they dont see it.

 

[see_change]

yeah its not enough i need about 600k, which is a few years away! i might be whinging but it is going to be very tough for the younger generation. 90% of the people on this forum would be above 30 so they dont see it.

But we not senile , so we do remember .

In particular I do remember hearing for the last 30 + years how property was too expensive for new buyers .

Cliff