OZ BOOM is over?...house prices falling & rates might drop
#511
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Re: OZ BOOM is over?...house prices falling & rates might drop
It does appear so, for some weird reason....
London
Average asking price for all London properties for sale in June 2010 was £656,925 (based on 16,580 advertised properties). http://www.londonpropertywatch.co.uk/avg_prices.html
So if these are 33.8% overvalued, the real value should be £490,975 or about 18 times the median UK full time wage.
Using the same reasoning for
Sydney.
Average Sydney House Prices $510,000 http://www.myrp.com.au/sydney_house_prices.do
So if these are 61.1% overvalued, the real value should be $316,770 or about 5.2 times the median Australian full time wage.
How do they work these things out ?
Although these do compare UK asking prices v Sydney RP data pricing, the difference of 18 times to 5.2 times, cannot be explained by that.
My calculations would show, based on a real property value of 4 times average wage:
London would be £108,000 which means London is 608% overvalued
Sydney would be $240,000 which means Sydney is 212% overvalued
Maybe I got something wrong... anyone fancy checking it ?
London
Average asking price for all London properties for sale in June 2010 was £656,925 (based on 16,580 advertised properties). http://www.londonpropertywatch.co.uk/avg_prices.html
So if these are 33.8% overvalued, the real value should be £490,975 or about 18 times the median UK full time wage.
Using the same reasoning for
Sydney.
Average Sydney House Prices $510,000 http://www.myrp.com.au/sydney_house_prices.do
So if these are 61.1% overvalued, the real value should be $316,770 or about 5.2 times the median Australian full time wage.
How do they work these things out ?
Although these do compare UK asking prices v Sydney RP data pricing, the difference of 18 times to 5.2 times, cannot be explained by that.
My calculations would show, based on a real property value of 4 times average wage:
London would be £108,000 which means London is 608% overvalued
Sydney would be $240,000 which means Sydney is 212% overvalued
Maybe I got something wrong... anyone fancy checking it ?
#512
Re: OZ BOOM is over?...house prices falling & rates might drop
Why use the median UK and not the specific inner London median?
If you look at wages, there is a greater difference across the UK than there is across Australia.
Stop bending the stats to fit.
(you sure you're not a politician?)
[On one hand Jeremy Beadle had a small todger, but on the other hand it was quite big]
If you look at wages, there is a greater difference across the UK than there is across Australia.
Stop bending the stats to fit.
(you sure you're not a politician?)
[On one hand Jeremy Beadle had a small todger, but on the other hand it was quite big]
Last edited by coolshadows; Jul 9th 2010 at 9:13 am.
#513
Guest
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Re: OZ BOOM is over?...house prices falling & rates might drop
So we should compare the inner London median wage to the Australian overall wage ? You really think that is a fairer comparison ? Not bending anything to suit ?
But if you say so...
So, the Inner London median house price compared to the average Australian house price is....
Is that what you think is fair ? Or does it only apply to one side of things, when it suits ?
If you want to compare the inner London median wage, then you also need to compare the inner Sydney Median wage, neither of which I have. Do you have these two figures handy ?
But if you say so...
So, the Inner London median house price compared to the average Australian house price is....
Is that what you think is fair ? Or does it only apply to one side of things, when it suits ?
If you want to compare the inner London median wage, then you also need to compare the inner Sydney Median wage, neither of which I have. Do you have these two figures handy ?
#514
Re: OZ BOOM is over?...house prices falling & rates might drop
I'll be interested in the outcome tho
#515
Guest
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Re: OZ BOOM is over?...house prices falling & rates might drop
In 2001 when the NSW average wage was $37,191, it appears that Inner Sydney was more like $77,000.
But then, defining inner Sydney isn't easy.
If we assume that is about right, then the current inner Sydney average wages would be about $145,000 (or £82,000)
From personal experience, when I was working in the Sydney CBD, in the early 1990's, an accounts clerk in our office got about $30k-35k, and a qualified CA about $75k -$90k. These are the figures I recall from doing the payroll. But this was dead centre CBD. I think I was on about $50k in 1992.
Note: these are not averages, just a few actual examples from my own experience.
#516
Re: OZ BOOM is over?...house prices falling & rates might drop
So we should compare the inner London median wage to the Australian overall wage ? You really think that is a fairer comparison ? Not bending anything to suit ?
But if you say so...
So, the Inner London median house price compared to the average Australian house price is....
Is that what you think is fair ? Or does it only apply to one side of things, when it suits ?
If you want to compare the inner London median wage, then you also need to compare the inner Sydney Median wage, neither of which I have. Do you have these two figures handy ?
But if you say so...
So, the Inner London median house price compared to the average Australian house price is....
Is that what you think is fair ? Or does it only apply to one side of things, when it suits ?
If you want to compare the inner London median wage, then you also need to compare the inner Sydney Median wage, neither of which I have. Do you have these two figures handy ?
#517
Guest
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Re: OZ BOOM is over?...house prices falling & rates might drop
#519
Re: OZ BOOM is over?...house prices falling & rates might drop
"More concerning, however, is our analysis of “fair value” in housing, which is based on comparing the current ratio of house prices to rents with its long-term average. By this measure Australian property is the most overvalued of any of the 20 countries we track. "
From http://www.economist.com/node/165428...42826&fsrc=rss
From http://www.economist.com/node/165428...42826&fsrc=rss
Last edited by freebo; Jul 12th 2010 at 2:09 am.
#521
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Re: OZ BOOM is over?...house prices falling & rates might drop
Have the lower paid had much faster wages rises than those in the higher paid areas to bring the difference closer ?
#523
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Joined: Jan 2005
Location: Brisbane
Posts: 4,298
Re: OZ BOOM is over?...house prices falling & rates might drop
"More concerning, however, is our analysis of “fair value” in housing, which is based on comparing the current ratio of house prices to rents with its long-term average. By this measure Australian property is the most overvalued of any of the 20 countries we track. "
From http://www.economist.com/node/165428...42826&fsrc=rss
From http://www.economist.com/node/165428...42826&fsrc=rss
#524
BE Enthusiast
Joined: Nov 2009
Location: Dullsville
Posts: 672
Re: OZ BOOM is over?...house prices falling & rates might drop
Comments please.
So, can you better it? Show us your analysis or better still your highly geared investment portfolio -
Actually, I agree with the article because rents are driven by what people can actually afford to pay versus house prices are determined by credit. My rental is $400 a week, house is worth around $600K and would cost around $800 a week mortgage with minimal deposit. Why aren't I being charged $800 a week then? Because we couldn't afford it and the I doubt if anyone else would pay that asking price. This is where I believe The Economist is correct in it's analysis.
So, can you better it? Show us your analysis or better still your highly geared investment portfolio -
Actually, I agree with the article because rents are driven by what people can actually afford to pay versus house prices are determined by credit. My rental is $400 a week, house is worth around $600K and would cost around $800 a week mortgage with minimal deposit. Why aren't I being charged $800 a week then? Because we couldn't afford it and the I doubt if anyone else would pay that asking price. This is where I believe The Economist is correct in it's analysis.