Welcome Guest [Log In] [Register]


Reply
So who can buy a house in Sydney for $1,076,000
Topic Started: 30 Oct 2016, 06:30 PM (4,806 Views)
Khaderbhai
Member Avatar
Wealthy Suburbanite

Ex BP Golly
1 Nov 2016, 07:06 AM
And even at that low level, the majority of people struggled to pay of their loans in their working life.
78% of households (92% of homeowners) have no mortgage after 65 years of age...

http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/1301.0Main+Features1322012
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
Profile "REPLY WITH QUOTE" Go to top
 
Sydneyite
Member Avatar


Ex BP Golly
1 Nov 2016, 07:06 AM
Indeed.
But not as good as the long term average of around 4 times wages.

And even at that low level, the majority of people struggled to pay of their loans in their working life.

Do you think people in the future will be able to do so, or will they roll over their loan package into reverse mortgage mode?
You ignore that huge impact of past and future real income growth, which has resulted in basic cost of living being a much smaller proportion of household income now than in the past. This means that yes, those loans will all be fully paid off, most in a lot less than the 25 or 30 year mortgage contract term.
Edited by Sydneyite, 1 Nov 2016, 01:17 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
Profile "REPLY WITH QUOTE" Go to top
 
Rufus
Member Avatar


Ex BP Golly
1 Nov 2016, 07:06 AM
Indeed.
But not as good as the long term average of around 4 times wages.

And even at that low level, the majority of people struggled to pay of their loans in their working life.

Do you think people in the future will be able to do so, or will they roll over their loan package into reverse mortgage mode?
You're forgetting this little fact. Interest rates were mostly above 10% for a massive 22 years and over 15% for a long period of time.

Posted Image

Attached to this post:
Attachments: Historical_Homeloan_Interest_rates_Australia.jpg (97.2 KB)
Edited by Rufus, 1 Nov 2016, 10:30 AM.
Take risks - if you win you will become wealthy, if you lose you will become wise
Profile "REPLY WITH QUOTE" Go to top
 
Terry
Member Avatar


Rufus
1 Nov 2016, 10:27 AM
You're forgetting this little fact. Interest rates were mostly above 10% for a massive 22 years and over 15% for a long period of time.
OK, that explains it. The suburbanites only traded 4 years of labor but the debt service component was higher. Not sure I follow your logic.
Edited by Terry, 1 Nov 2016, 11:32 AM.
Profile "REPLY WITH QUOTE" Go to top
 
Ex BP Golly
Member Avatar


Golly, three people telling me what I'm forgetting when I point out house prices have gone from circa 3.5 times wages, to almost 14 times wages in a couple of decades .
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
Profile "REPLY WITH QUOTE" Go to top
 
Sydneyite
Member Avatar


Ex BP Golly
1 Nov 2016, 02:59 PM
Golly, three people telling me what I'm forgetting when I point out house prices have gone from circa 3.5 times wages, to almost 14 times wages in a couple of decades .
With those numbers, you are also "forgetting" the significant change in population density and the commensurate change in prevalent dwelling type in Sydney as well (ie majority of FHBs probably by flats rather than free-standing houses nowadays), plus the change from a very discriminatory financial world that ignored a woman's income "because they have babies and stop work".
Edited by Sydneyite, 1 Nov 2016, 04:33 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
Profile "REPLY WITH QUOTE" Go to top
 
Rufus
Member Avatar


Ex BP Golly
1 Nov 2016, 02:59 PM
Golly, three people telling me what I'm forgetting when I point out house prices have gone from circa 3.5 times wages, to almost 14 times wages in a couple of decades .
It was 3 to 5 times income, not the median postcode income in a census report.
Right now people who borrow to buy their first home are still buying 3 to 5 times household income in the majority of cases.

It would be quite impossible for anyone to borrow 14 times their wage from a bank.
Edited by Rufus, 1 Nov 2016, 03:30 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
Profile "REPLY WITH QUOTE" Go to top
 
Terry
Member Avatar


Sydneyite
1 Nov 2016, 09:50 AM
You ignore that huge impact of past and future real income growth, which has resulted in basic cost of living being a much smaller proportion of household income now than in the past. This means that yes, those loans will all be fully paid off, most in a lot less than the 25 or 30 year mortgage contract term.
Garbage. The mortgage-to-labor unit cost ratio is greater than its ever been. Of course, if you can get the kids and grandparents all pitching in, you're possibly right that the suburbanites can pay off their debts quick going into the future.
Profile "REPLY WITH QUOTE" Go to top
 
Rufus
Member Avatar


Terry
1 Nov 2016, 03:32 PM
Garbage. The mortgage-to-labor unit cost ratio is greater than its ever been. Of course, if you can get the kids and grandparents all pitching in, you're possibly right that the suburbanites can pay off their debts quick going into the future.
But the cost of the mortgage is lower than it's ever been.
The interest cost of a mortgage is a huge cost component in housing.
Take risks - if you win you will become wealthy, if you lose you will become wise
Profile "REPLY WITH QUOTE" Go to top
 
Terry
Member Avatar


Rufus
1 Nov 2016, 03:39 PM
But the cost of the mortgage is lower than it's ever been.
The interest cost of a mortgage is a huge cost component in housing.
Irrelevant. A price tag of $100 is still more expensive than a price tag of $90. Whether or not the margin is 50% or 15%, that doesn't change.
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
ZetaBoards gives you all the tools to create a successful discussion community.
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy