the troubadour

According to a report prepared by analysts, CoreLogic , Home values have plunged 25% in real terms across five Australian cities in the past decade.


Price Index Data, which shows rate of inflation to national dwelling values over past ten years to 2017....


Sydney ....up 44.1%
Melb.........up 39.1%
Bris.........Down 11.4%
Ade.........up 3.8%
Perth.......Down 25.4%
Hobart....up 1.2%
Darwin.....Down 16.7%
Can..........up 1.1%


Combined Capitals 21.3%
National 13.8%


Sydney growth in 17 was 1.2% in Real Terms but last Dec quarter 2.5% slide in value......

the troubadour

Although here in Perth we have seen the greatest decline, in theory it should benefit the low income earners that struggled with housing prices during the boom, but in reality they don't appear to have gained much.


A hard call perhaps when the top 20% of WA households hold almost two thirds of the wealth.
The bottom 20% of households in contrast hold less than 1%.


The inequality may well surprise some people .

spouse of scouse

Given that half the world's wealth is held by just 1% of the global population, I don't think those figures are surprising at all.

the troubadour

Well not surprised but shocked perhaps? It is the fact that Australia's decline is rapid being among the highest in growth in income inequity in the world over the past few decades. IMF findings.


In fact it has dropped to 22 out of 35 countries in OECD (developed nations)

denzil73

No big surprise. If you could actually get hold of the house selling and renovation shows from 10-15 years ago I think you'd be very shocked at the price of housing back then plus the land rates.

The supply and demand BS has been a well used smoke screen to hide blatant profiteering. Land prices are a joke and many properties the land is worth far more than the house sitting on it.

The job and education industry isn't much better with poorly legislated education policy allowing 'learning institutes' to run course that the certificate means nothing in the real world. But it's a great money making exercise for the morally corrupt who care only about making money and only enough about the education to get students through the door.

Beoz

Its all about interest rates. 15 years ago a $500,000 mortgage cost you about $3000 a monthly in repayments. Today it costs $2000. Or better put, today, servicing a $3000 a month mortgage means you can loan $700,000. That, on top of natural property inflation, is where we are today.

In reality, cost of living is no different today than it was 15 years ago. Servicing mortgages is still around the same proportion of income. Many other things are much cheaper. Believe it or not, buying a flight, petrol and rent are less today than they were 15 years ago as a proportion of income.

The big challenge about property is saving for the deposit. Once that's ticked, serviceability is pretty straightforward and banks won't let you get beyond that serviceability level.

the troubadour

That's where the casino economy comes into play of course. People playing on low interest continuing and borrowing to the hilt. Banks complacent as well of course will interest only loans.


No wonder Australia is one of the most leveraged countries on earth. Switzerland, the highest, has a better pension system and social welfare in place.


Hit hard times in Australia and a number will end up with very little. There's a very simple economic fact. Borrowed money needs to be repaid.

Beoz

Lot of debt out there for sure. The US at 20 trillion or something. Rapid interest rate rise? No chance. Maybe a bit to stop the borrowing but anymore than that is suicide.

Stuck in Auckland

"The $321 trillion timebomb: Former UK bank boss warns debt may trigger next meltdown"

The $321 trillion timebomb: Former UK bank boss warns debt may trigger next meltdown - NZ Herald

the troubadour

With the average loan now $500,000 according to comparethemarket.com, I'd say we are in a serious crisis.
Australia is the third least affordable country in the world. Its people have the second highest rate of debt in the world, and wages are stagnant and business appears to want to keep it that way. On top of that, we have a decline in house prices, with Hobart of all places , ahead of the pack and one of the few with prices rising.


I'd say that looks remarkably bad. Banks through own stupidity with easy loans in lazy real estate business, have over exposed themselves to the vulgarities of the housing market, government intervention in shoring up the market just inflamed the situation. The result being we are exposed to very serious trouble when interest rates are forced to rise, for reasons as I've explained before, the cost of foreign borrowing and rise of American rates and currency.


Note the RBA is calling on business to raise wages after sound profits. All they, the corporations, seem to be able to do is call for tax breaks, at a time when most the big corporations don't pay or minimum amount due to creative tax accountants.


The sound of anger out there is mounting. The sad thing being, many, quite possibly most, don't realise just how bad things have got and how worse they are very likely to become.


A very sticky wicket to be played without doubt. Obviously, the government and related business will down talk the situation, in order that the horses don't bolt entirely. But interesting, if not very scary days ahead for many.

the troubadour

Now he is out of the arena he can voice his concern. A concern long expressed by any number in certain areas that the piper will at some stage demand payment. Building wealth on debt always a gamble that wouldn't be able to be maintained.

denzil73

Maybe so but you are missing the fact of how much property prices have increased in those 15 years. So what if you pay $1000 less per month on $500,00 when 15 years ago that same money would have bought a house now worth 3 or more times that. Hence the same mortgage for that house is now out of the reach of most people. THAT is were the problem lies.

The others are also correct in the complacency of people living on credit cards and large mortgages. When the economy takes a tumble, and it will, there will be many people destitute in the streets and a banking system that can't offload the large amount of properties they've now foreclosed on.

Was the US housing crash not a blaring warning sign for how greed will screw over the average guy?

Not the banks cos those corrupt, greedy gits will get bailed by their government chums. Every country needs to do what Iceland did and incarcerate the greedy bastards.

But hey, let's see how this pans out over the next decade

the troubadour

I note Domain site, the propaganda voice of the real estate industry and as such increasingly irrelevant, has done a piece in support of prices, totally of mark of course. The good Doctor, whom scribed the piece, completed his article by stating low interest rates together with increasing wages will ensure a continuation. Earlier piece of course condemned the increasingly negative sentiment.


I do hope the good doctor is not of the medical variety. Wages are rising and at best static and prices are falling.


What a lame piece and only add more fuel to the fire with thinking people concerned about the state of the market.

BadgeIsBack

Petrol has been a bargain this last 10 years. Not 18 months ago it was a steal at 2004 prices. There have been recent blips, but still affordable.

You can fly to California for not much more than a 1000 dollars.

Beoz

The US housing crash was caused by poor government policy allowing people to walk away from mortgages without penalty.

Notice how Australia and the UK didn't suffer such a dramatic and prolonged fate? You just couldn't walk away.