It doesn't attempt to - it tells us about the ownership status of dwellings.
But taken together with the household formation rate, we can see that more adults must own dwellings per head of population now than in the past. No, it's not necessary to know that. If that was the case they would either have to keep their excess homes empty or rent them out. So we would either see a big jump in the unoccupied dwelling count (we haven't - it has stayed around 9-10% for 40 years), or we would see a big jump in the number of rented dwellings which would be reflected in the home ownership rate.
Try again.
Nice try Shadow. It is just one of the many unknown variables that you haven't factored into your made up conclusion. Number of holiday homes owned by the wealthy, number of people in rentals vs owner occupied, all of these are variables affecting the outcome.
As Veritas said just admit you don't really know and are making up your conclusion.
mel
22 Aug 2013, 05:51 PM
without even seeing another post in this thread i would suggest you focus 'blame' on the planners - new cities don't appear to be an option although there has been some murmuring of promoting regional centers as an option of late.
Mel I was simply after an acknowledgment of the obvious - homes are relatively less affordable today than then. No blame casted, just a simple look at the numbers and oh yes, home prices are 2.5x more expensive relative to incomes, first home buyers do have it harder today.
Instead we have Shadow obfuscating by making up unsubstantiated claims that a higher proportion of people own homes today than back then.
If you're so interested, why don't you work it out? I've given you all the information you need to perform the calculations.
I suspect that is the closest I will get to you admitting that I am right.
I understand your reluctance: that "home ownership" chart is one of your favourites when you are combatting the notion that housing is less affordable than it was 25 years ago.
Like a child with his favourite teddy, you will cry and stamp your feet before letting someone take it off you.
Now we know, the chart is pretty fucking useless because it tells us nothing about the rate of change in home ownership rates among the adult population over time. That after all, is the information that's important not who owns the fucking houses.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Number of holiday homes owned by the wealthy, number of people in rentals vs owner occupied, all of these are variables affecting the outcome.
I listed the variables in my last post. It's not necessary to know specific information like 'holiday homes owned by the wealthy'.
The unoccupied dwellings count is sufficient (and constant over the period in question so will make no difference to the outcome).
Veritas
22 Aug 2013, 05:59 PM
that "home ownership" chart is one of your favourites when you are combatting the notion that housing is less affordable than it was 25 years ago
Not any more... now I prefer the household formation chart - it actually does a better job of showing how much easier it has become for people to own a home (when used in conjunction with the home ownership chart).
The home ownership chart on its own only suggests that it is equally easy to own now than it has been for the past 50 years, but when you look at it together with the household formation rate chart... that paints a whole new picture... it is actually EASIER to own a home today... more and more adults per head of population are doing it!
Sydneyite you refuse to concede that house prices 2.5x more expensive today relative to incomes means it is more difficult for todays home buyer. I can tell you are intelligent from some of your other posts, but if something so basic eludes you then I have to wonder what your agenda is.
I have no other "agenda".
I simply disagree with many of your over-simplistic assertions. You want me to concede that "house prices 2.5x more expensive today relative to [single average] incomes means it is more difficult for todays home buyer"? Well, all other things being equal, I would agree that would be a correct statement. BUT, as has been shown many times, all others things are NOT equal. In fact FAR from it. Coupled with this reality, are numerous statictics, including ownership rates, credit growth rates, mortgage default rates, transaction volumes over periods of weeks/months/years/decades, and much much more, which suggest that there are plenty of people out there able to purchase if they choose to, and comfortably pay down their mortgages . And prices keep rising.
If it was really as bad as you think, people wouldn't be buying, and prices would be falling, not rising. QED.
Have you ever studied any physics? There are many things in the universe that seem to defy logic/common sense - but if the evidence tells you something else than what your "common sense" tells you, it pays to investigate and understand all those other factors, and build a model that accounts for them, and that also can explain what you observe.
Not any more... now I prefer the household formation chart - it actually does a better job of showing how much easier it has become for people to own a home (when used in conjunction with the home ownership chart).
The home ownership chart on its own only suggests that it is equally easy to own now than it has been for the past 50 years, but when you look at it together with the household formation rate chart... that paints a whole new picture... it is actually EASIER to own a home today!
Really? Lets take this example:
I move from moms, buy a house and move into it. I have formed a household. I move three unrealted adults into the house. They pay me rent. The fact that I own and they rent is not captured anywhere in the ABS data regarding home ownership.
My newly formed household is counted as "owner occupied" and contributes to the mythical 70% home ownership despite the fact that only 1 of the four adults there actually owns a house.
Weird hey?
I wonder how often this exact scenario, or very similar, is replicated across Australia. I'd say quite a lot.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Australia's home ownership rate rose from 50% in the 1950s to 70% today, suggesting it is much easier to own a home now than it was in the past.
The home ownership rate has hovered around 70% (give or take a couple of percent) for the past five decades.
Half a million homes are bought every year, and mortgage default rates are very low. This suggests that people are able to afford homes.
Agree you go again,calling buyers, home owners. Outright ownership rates have fallen from 47% to 30.9% and your offset account argument, as you admit! is just your gut feel and meaningless.
I simply disagree with many of your over-simplistic assertions. You want me to concede that "house prices 2.5x more expensive today relative to [single average] incomes means it is more difficult for todays home buyer"? Well, all other things being equal, I would agree that would be a correct statement. BUT, as has been shown many times, all others things are NOT equal. In fact FAR from it. Coupled with this reality, are numerous statictics, including ownership rates, credit growth rates, mortgage default rates, transaction volumes over periods of weeks/months/years/decades, and much much more, which suggest that there are plenty of people out there able to purchase if they choose to, and comfortably pay down their mortgages . And prices keep rising.
If it was really as bad as you think, people wouldn't be buying, and prices would be falling, not rising. QED.
Have you ever studied any physics? There are many things in the universe that seem to defy logic/common sense - but if the evidence tells you something else than what your "common sense" tells you, it pays to investigate and understand all those other factors, and build a model that accounts for them, and that also can explain what you observe.
Ok Sydneyite - it seems that you genuinely believe that even with such a monstrous increase (we are talking an increase of 150%!!!) relative to incomes that other factors even out that increase. Granted with 2 incomes and with the current low interest rates if a couple wait a few years later than their parents did (on one income) purchasing a house is do-able (only just for dual average income earners). IMO that is comparing apples with oranges though, i.e. you are comparing the buying power of a couple today vs. a single back then.
I honestly think you may be kidding yourself justifying such a gigantic increase with the factors you mention, even with mega low interest rates and still high employment rates property prices are at the same level as 2 years ago. If unemployment spikes significantly (and you are kidding yourself if you don't think it will at some point) there is not much more room to go downwards with interest rates. You've made your investments and that's fine, but don't turn a blind eye to the very real dangers to a property market priced 2.5x higher relative to incomes than 25 years ago.
I move from moms, buy a house and move into it. I have formed a household. I move three unrealted adults into the house. They pay me rent. The fact that I own and they rent is not captured anywhere in the ABS data regarding home ownership.
It is captured. It is reflected in the ABS data as one extra owner occupied household, rather then 4 OO households, or 2 OO households and 2 renter households etc. Whatever permutation of new households is created by the actions of those four people, it will be recorded.
The ABS data incorporates people doing what you have suggested, and it still shows the proportion of households increasing over time. Your scenario is more than balanced out by the greater number of scenarios where the three renters instead go out and create their own households. We know there are more people creating their own households than people moving into existing households because the overall number of households per head of population is increasing.
Imagine pouring a bucket of water down a pipe. The end result will be lots of water at the bottom of the pipe. We can then measure the volume of water at the bottom. The fact that some water will have evaporated on the way down and droplets may stuck on the inside of the pipe doesn't change the fact that the big picture is most of the water now at the bottom.
Similarly, we know the number of households has increased. The fact that some people will have instead moved into existing households instead of forming their own doesn't change the big picture - i.e. the proportion of households has increased.
It is captured. It is reflected in the ABS data as one extra owner occupied household, rather then 4 OO households, or 2 OO households and 2 renter households etc.
The ABS data incorporates people doing what you have suggested, and it still shows the proportion of households increasing over time. Your scenario is more than balanced out by the greater number of scenarios where the three renters instead go out and create their own households. We know there are more people creating their own households than people moving into existing households because the overall number of households per head of population is increasing.
Imagine pouring a bucket of water down a pipe. The end result will be lots of water at the bottom of the pipe. We can then measure the volume of water at the bottom. The fact that some water will have evaporated on the way down and droplets may stuck on the inside of the pipe doesn't change the fact that the big picture is most of the water now at the bottom.
Similarly, we know the number of households has increased. The fact that some people will have instead moved into existing households instead of forming their own doesn't change the big picture - i.e. the proportion of households has increased.
Shadow All that your chart shows is that we have been building more houses than we needed. good work.
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