but an extention of that theory is that prices will only rise due to high demand and low supply until such time the prices reach the point were the consumer will not or can not afford to pay them
An average 6%pa growth means that there must be real wage growth over and above inflation for housing to remain affordable.
once prices have a period were the average growth is exceeded then there must be a period of stgnation to allow wages to catch up
With record foreclosures and mortgage stress, housing currently is far from affordable and not likely to improve any time soon
Yes some cashed up migrants maybe able to afford the over inflated prices but this is only going to create a larger problem for the many who are already struggling
Perth has ample vacant land and if the affordability problem does become any worse then the government both state and federal will have to take dramatic actions or face being thrown out of office.
Any such action will absolutely kill property values.
