Homeownership & Household Formation ON THE RISE in Australia but delayed for sociodemographic reason; Household formation delayed until later in life because MARRIAGE is the key determinant
Tweet Topic Started: 23 Aug 2013, 10:58 AM (6,516 Views)
Well, that's the whole point of the report posted by Bullhawk.
If it was due to financial reasons - i.e. homes are less affordable, then you would expect to see an overall drop in the home ownership rate and household formation rate.
But what we are seeing instead is a deferral until a later stage in life, linked closely to later marriage, and then an acceleration in the household formation rate.
So once they do decide to get married and settle down, they're forming new households at a faster rate than they did in the past, which suggests affordability isn't an issue.
Yep, no FHB grants around this time, so this new property growth cycle should be a bit slower slower but also a lot more sustainable.
I reckon this growth cycle is going to keep going until the RBA raises rates significantly, which is another few years away. I wouldn't be surprised if they start the raising process late next year, but they will do it very gradually and it will be a few years before they get rates up to a high enough level to put the lid on house price gains.
Of course, once we get there all the bears will flood out of their caves again proclaiming the start of the 40% crash...
I agree. Until Rates rise a bit to take demand out of the market place we will continue to see prices rise. As you say it is most likely 18 months away if not more. We could also see a rush to buy just as rates rise and people lock in 3-5 year mortgages at lower levels in the expectation that rates will rise for a number of years.
The only other option is a massive construction blitz which I cannot see happening, increase yes but not enough to keep pace with demand, not even close.
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A statement. You are ignoring the rise of the lone occupants and that is what your chart reflects.
Yes, it's good to know that homes are affordable enough for people to establish households on their own... a lot of bears here seem to think two incomes is mandatory, when that's obviously not the case, and yes, the household formation rate includes those lone occupant households. I assume this was the point you're trying to make?
Yes, it's good to know that homes are affordable enough for people to establish households on their own... a lot of bears here seem to think two incomes is mandatory, when that's obviously not the case, and yes, the household formation rate includes those lone occupant households. I assume this was the point you're trying to make?
The rise of lone occupants is not in the young, but the old as evidenced by the fall in populations in many burbs in our cities. Your claim that more single young people can afford homes is without basis.
This is off topic, but how strong is the house sales surge from your perspective.
It looks stronger than I expected. It has picked up over the last 3 or 4 weeks.
Peter
I keep a close eye on the streets around me, small sample, so far from scientific. In the last 4-6 months properties have been selling a lot more quickly (but still not real quick). There have been three auctions which have all sold at auction, or shortly after - unheard of for Brisbane and this area.
I keep a close eye on the streets around me, small sample, so far from scientific. In the last 4-6 months properties have been selling a lot more quickly (but still not real quick). There have been three auctions which have all sold at auction, or shortly after - unheard of for Brisbane and this area.
Yes it's hard to know but the anecdotal evidence is all pointing one way.
I had a few drinks with a Melbourne REA recently and she told me that she is getting 100% clearance at auctions, all well above the reserve.
I've know this person since I started school and it was a social occasion - so there is no reason for her to put any spin on the narrative. As you know it takes some months for these sales to filter through to the official data.
Any expressed market opinion is my own and is not to be taken as financial advice
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