See, if Home A is worth $500k now and $750k in 3 years WITHOUT ANY CHANGES how does that constitute "improving our homes"?
An individual dwelling doesn't need to improve in order for people to improve their homes.
People can also improve their homes by moving to a better one (not just by developing and extending their existing home).
As cities grow, certain homes become relatively more valuable simply because of their location.
New homes on the fringes are less desirable and hence less valuable.
If productivity gains give us more disposable income, then that income will chase the most desirable homes, and push up the price.
If everyone instead decided to devote their disposable income to works of art, or gold bars, or shares, then those are the things that will rise in value.
But most people prefer to spend it on their homes. That's just basic human nature.
See, if Home A is worth $500k now and $750k in 3 years WITHOUT ANY CHANGES how does that constitute "improving our homes"?
An individual dwelling doesn't need to improve in order for people to improve their homes.
People can also improve their homes by moving to a better one (not just by developing and extending their existing home).
As cities grow, certain homes become relatively more valuable simply because of their location.
New homes on the fringes are less desirable and hence less valuable.
If productivity gains give us more disposable income, then that income will chase the most desirable homes, and push up the price.
If everyone instead decided to devote their disposable income to works of art, or gold bars, or shares, then those are the things that will rise in value.
But most people prefer to spend it on their homes. That's just basic human nature.
Agree with the relative location point - as time goes the same house becomes "relatively better" because of city growth.
But there must be a limit to this process - of houses becoming "relatively better". and channeling more income into housing as other costs become relatively less.
and homes on the fringes of Australian cities are the ones which prices increased the most over the last decade or so
how do you explain that?
You would have to provide some specific examples, but if that's true, a reason might be that the city edge has reached a limit, and no new fringe suburbs were developed further out than the suburb you are measuring.
You would have to provide some specific examples, but if that's true, a reason might be that the city edge has reached a limit, and no new fringe suburbs were developed further out than the suburb you are measuring.
reached a limit?
highest house price growth is recorded in regional small towns
Quote:
Regional (non-capital city) areas experienced stronger house price growth than capitals in four states In four out of Australia’s seven states and territories, the non-capital city (regional) areas experienced stronger house price growth than the capitals from 2001 to 2011. These States are the Northern Territory, where regional house price growth is at 221 per cent, regional Tasmania at 213 per cent, regional Victoria at 149 per cent and regional NSW at 146 per cent.
so "reaching limit" is not the reason, what it could be?
highest house price growth is recorded in regional small towns
so "reaching limit" is not the reason, what it could be?
We were discussing growth in the city fringe vs desirable/inner city suburbs.
Regional small towns are not the same as city fringe areas.
Everything beyond city limit is regional area
we were discussing your claim that increased demand for limited land drives prices up; you used as an example inner city suburbs that supposedly increased in price because there is high demand and no new land, but if your “demand for limited land driving prices up” theory is correct how you explain that regional and fringe areas increased more in price
it is clear that land supply is more limited in inner cities than these areas, still prices increased slower in inner cities
we were discussing your claim that increased demand for limited land drives prices up; you used as an example inner city suburbs that supposedly increased in price because there is high demand and no new land, but if your “demand for limited land driving prices up” theory is correct how you explain that regional and fringe areas increased more in price
Your quote above says that this effect occurred in only four states. I assume the opposite occurred in the other states? Without knowing the specific towns and suburbs in question, I would suggest that in the case of individual cities, it may be that the city edge reached a limit and new fringe suburbs were not developed further out. In the case of separate regional towns, it's possible those towns experienced their own supply constraints - perhaps greater than the constraints in the major cities of the states in question (due to planning laws, bureaucracy, NIMBYism etc.)
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