Property in Australia in still VERY cheap

interesting.

I wonder is that due to Aust average earinings being high or due to house prices being low?  I would be hardpressed to think house prices were high in Morocco.

 There's a lot of rich countries down the bottom end (though what is bangladesh doing there?)

is anyone out there worried about a "bubble"? 

When I see things like the 20% increase, I think 3 things:

1 damn why haven't I got more properties by now.

2. Is this all a big 'bubble that is going to burst and leave me trapped if I buy in now?

3. Does this 20% increase represent a "growth spurt" (biggest since 1989, apparently) that will then be followed by flat-lining for the next 10 years, so what's the point if I've missed the boat?

Interesting info…even more interesting is Singapore at 14.4. Considering the vast majority of relatives my age are earning somewhere around $3K a month (on average, meaning that my bro and another cousin for example, are just on $2500), and a crap semi-d pricing in at least $1.2 mil, the multiple is more like 33 (assuming single income, and half that if double income). So I guess it really depends on what kind of housing we're talking about. If we're referring to gov't housing however, which is a high-rise shoebox at $250K, then the multiple is around 7, and a miserly 3.5 assuming double income.

Obviously nobody knows where ppty prices are headed. The rising interest rates have been much more predictable. I should have bet $50 (the approximate rise in mortgage payments I would need to make given 25 basis pts rise) on each of the RBA's meetings and I would be several hundred dollars on top by now, with odds of 3:1.  And if I lost each time, no biggie, because I'd be no worse off.

Who thinks the RBA will raise rates again today? They think that raising rates will control house prices. Wrong? Well, consider that an article I read states that with negative gearing, investors typically feel only half the pinch of an interest rate rise. So if the RBA went crazy with a 100 basis point rise that would send FHB into a crying fit, investors will take it like a bump to the thigh and just keep walking anyway.

So, is raising rates really justified in an environment that is dominated by investors, not FHB? Honestly I don't care, because I'm about to rent my house out anyway and move back with my parents. Haha! So there you go, RBA, in ya face!!

If none of the regulations changed, I think we can't be wrong with property. It's back to the simple equation of supply and demand. It's not as easy as with shares where a company can decide on a split as they wish. Subdividing or building units takes a heck of a lot longer. So if you have an increasing number of people clamoring for the same asset, prices are sure to rise. Is Australia likely to curb immigration rates? I dare them to, for they'll stupidly reduce the numbers of people who'll pay for the bloody pension as the baby boomers stop work. Let's face it: which govt will settle for LESS tax money? They still need to fill the coffers, and line their pockets. It's in THEIR interest to maintain immigration rates. Why would they care about housing? They probably have a few properties each.

Question is, will it still be profitable after factoring all your expenses? Only time will tell. Or even better, just sit in front of the calculator, punch some numbers and see for yourself.

Sadly, there's plenty I want to buy but just don't have enough money to do so yet. The target is to get another before the end of this year and that would be achievable unless interest rates go into the high double digits. The seriousness of my intent sometimes raises a few eyebrows amongst relatives and friends. Obviously it'd be an uphill climb, trying to go very far and in such a short period of time, but if I want to retire at 40, that's the way it's gonna be!

Hi, I was interested enough to play with the numbers for Singapore. I came in at 16x my salary for the kind of apt I'd qualify to buy.

My godson on less than half my salary came in at 8x.

For Malaysia, I came in at 12.6x, my nephew to buy at crap cement box low cost flat would be only 2.5x

Incidentally, Singapore has a lot of restrictions on housing. I know people who camped overnight to sign up for apts. and people who sold their queue numbers for thousands of dollars. My ex colleague's brother in law was a professional queuer and made a lot of money selling his queue number for apts and also for country club membership.

And I'm not joking, it's all true.

KY

There is a documentary on people living in Lagos. There is about 1000 people living on top of the tip in houses made form scrap. There is 16 million people living in the city. The future where you can't afford to live in a house?

D

This is a great article. I thought property was not able to increase more in oz until I saw this.  Who knows where the top is.

Interesting about the US though. 

This link

http://www.numbeo.com/cost-of-living/prices_by_city.jsp?currency=AUD&itemId=101

is a realistic indicator of what property costs to buy, in per sq m terms, not 8sq apartment vs 35 sq house. 

Look at the per sq m price MEL/SYD vs other big cities of the world. Also, note that this list is probably quite old and MEL/SYD curent price would now actually be a fair bit higher, while the rest of the GFC affected world has since taken a pounding. Therefore, MEL/SYD are now very far from cheap in my view.

From what i've seen in Greece, property is rarely bought/sold. It is mainly passed down/inherited/fought over, so in some cases income is largely irrelevent to house prices. Probably the same in many other countries. 

Not sure what you mean? The stats quote local currency incomes to local prices.  Forex issues dont even factor into these comparisons.