Re: Australian Median Property Prices from 1982 to 2004
 

Overall work particpation is increasing only slowly, going up for females & down for males -

"Over the last two decades, Australia's labour force participation rate has increased slowly, rising from 60.8% in 1979 to 63.7% in 2002. The main factor behind the long-term rise in the labour force participation rate has been an increase in female participation, which has risen from 43.6% in 1979 to 55.5% in 2002. In contrast, male participation fell from 78.4% to 72.2% over the same period. Graph 1 shows male and female participation rates from 1979 to 2002"

http://www.abs.gov.au/ausstats/[email protected]

Re: Australian Median Property Prices from 1982 to 2004
 

Too true. The thing is, for anyone who has children (and therefore needs a house rather than a flat), they are going to go through a stage where they do not have two full time incomes. This stage will last years and even when it's over there are childcare costs.

As for dual income families resulting in a one-time and irreversible adjustment to house prices, I don't buy it. I heard precisely the same argument put forward in the late 80s but prices in the UK and Australia still crashed in the early 90s.

The bottom line is that we're experiencing a bubble in house prices and therefore will correct to historical average income multiples. Unfortunately, bubbles tend to overcorrect - the UK bubble of the 80s bottomed out at 2.9 x average income.

Anyhow, here's an interesting article about it from GMO:

https://www.gmo.com/NR/rdonlyres/E5E...r_1Q05_ALL.pdf

Re: Australian Median Property Prices from 1982 to 2004
 

quite an interesting ansalysis - and a bit of a departure from the usual arguments

Incidentally one of the reasons why I like australia is that it is not *impossible* that we can get by one income in the *best* times. Best = me being in my current type of work at current rates which is not much to ask for but may not always happen

I still sleep at night put it that way.


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Re: Australian Median Property Prices from 1982 to 2004
 

Is the answer the same as how much wood could a woodchuck chuck if a woodchuck would chuck wood? :confused: :D

Re: Australian Median Property Prices from 1982 to 2004
 

It is an interesting article. The comparisons of House price to incomes actually suprised me though.
The UK is shown at about 5.8
Australia at about 4.8
Boston USA about 6.5
USA as a whole 4.2

Re: Australian Median Property Prices from 1982 to 2004
 

Yes, it is interesting, though I think the argument is essentially very simple; house prices are too expensive compared to the historical norms and will correct. The questions that follow are:

1. If you accept a correction will occur, when? Trying to pick the top and bottom of a market is notoriously difficult. If you put off buying back in the early 2000s then you've missed out on some huge rises.
2. If you don't accept it then it follows we're in a "new paradigm" and where's your evidence for it?

The most sensible advice is probably not to overstretch yourself. Don't panic into taking out a mortgage at horrendous multiples of earnings in the fear you will never be able to buy otherwise.

As to you being able to service your mortgage on a single income, is this simply a result of house prices in Oz being cheaper for UK immigrants with housing equity in their back pockets?

I don't want to go on about this, but I've seen statements on here about property in say Perth not being overpriced. The average house in Perth is at about 6 x average earnings. It may look like a bargain to people from outside the country but that doesn't mean it isn't overpriced!

Re: Australian Median Property Prices from 1982 to 2004
 

I quoted another article here recently showing many cities in Australia at 6 x earnings, ie, much closer to the UK.

Re: Australian Median Property Prices from 1982 to 2004
 

The Sydney house price graph was a bit jerky to say the least. Those trying to draw trends from those graphs would struggle to make the current market look undervalued. I will put away my crystal ball.

Re: Australian Median Property Prices from 1982 to 2004
 

Ah yes, but if comparing the two, then it must either be City to City eg: London to Sydney
or Country to Country eg Australia to UK.

Comparig the most expensive cities in Australia (say 6+) to the UK average (5.8) is like comparing London (say 6+) to the Australian average (4.8) ?


However, one problem with ALL statistics is which ones do you believe ?

And when it all boils down to it, all we need to do is find out where Bondipom has put his crystal ball :D

Re: Australian Median Property Prices from 1982 to 2004
 

Does it also mean that all those women are working for no purpose (financially)?

Ie 25 years ago one income was enough to support family and buy a home, now 2 incomes are required and the key reason is to afford the mortgage on a much higher priced house (relative to single income)? Other costs - car, food, clothing etc have generally come down in real terms but house prices have increased way beyond inflation.

No mysogyny, just a thought. :)

Re: Australian Median Property Prices from 1982 to 2004
 

Most households now have two cars, 3 or 4 TVs, Videos, DVD's, Computers, more gadgets than anyone ever thought of, plus more holidays, weekends away etc., etc, than we did around 30 years ago, when one income was sufficient :)
And I'm sure women only used to have a small number of shoes and handbags, not like today :D

Re: Australian Median Property Prices from 1982 to 2004
 

Not to mention holiday homes, oseas trips, kids staying at home longer requiring more support.

One other factor that hasn't been mentioned, I beleive that In Japan, that house buying is carried across generations, IE: it takes two or three generations to buy a house. Now that would be hard to take.

Re: Australian Median Property Prices from 1982 to 2004
 

Would also be interesting to see an interest rate comparison

Re: Australian Median Property Prices from 1982 to 2004
 

As it happens I do have a copy of the monthly Base Interest rates for about 30+ years somewhere on my hard drive, but not sure what I called it :D

Re: Australian Median Property Prices from 1982 to 2004
 

Japan also had the mother of all property crashes. You're talking falls in some places of 90%. Of course, those people who bought at the top are still lumbered with a 50 year mortage or whatever.