Article can be viewed at:
http://www.realestate.com.au/doc/Resources/News/home-ownership-dream-fading.htm?rsf=newsletter_rea
What are your thoughts on this article?
Rubbish article.
The concept that Australian real estate is the most expensive in the world was also outlined in the recent Demographia study, but that study was flawed in many ways: only included US, UK, Canada, Australia, New Zealand and conveniently forgot to include the very expensive markets in Europe. Furthermore these studies never take quality into consideration, a so called median property in Australia is significantly larger with more land content than a median property in many European countries.
The point that home ownership hasn’t increased in the last decade obviously has to do with price / earnings ratios, but don’t forget that even Australia is seeing an demographic trend emerging where renting is becoming a preferred choice for many – not because they can’t afford to buy. This trend has been in existence in many European countries for a long time and will grow in Australia especially with Gen X and Y now in the driving seat.
Erik
Erik
I'm not prepared to say whether it is right or wrong. However, one thing I'd say is never get too comfy thinking the Australian property market is immune from downturns, and even the unexpected, i.e. "that could never happen here" mentality. We've seen this sort of wayward thinking in the share market, when we least expect a crash.
Property values aren't a one-way street. Anything that gets to a level driven by speculation where the buyers dry up is always a disaster waiting to happen.
Wezwaz,Agreed, slumps in the market can and will happen, in fact there is one happening right now in certain sections of the market.What just really annoys me is these economists, professors etc. making huge claims and predictions based on very thin facts and usually biased to one side of the story i.e. it's either boom or bust and you never get a well balanced review of the facts, figures and likely scenario's but then again that doesn't sell or get headlines. I don't believe in a bust in Australian property, but no boom either for quite some time. Aussie property is not cheap, but people have to view this in the context that Australia despite it's huge landmass is in fact on of the most urbanized countries and Aussie median properties are relatively large, with a lot of land content and high quality compared to other countries. I think there will be a necessary shift to more medium density developments which is also supported/accepted by the upcoming Gen Y buyers / renters. The one thing the Australian government may do is to release more land and simplify development processes / reduce development costs which I guess would reduce pressure on prices in outer suburbs.Erik
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