You are correct on many fronts but slightly not full-picture on another front.
"Since 2001 (on slightly different timing) we have been experiencing BOTH a property and share market boom"
Weeeellll sort of. What has actually been happening has been segmented growth in property. People here have made much of the drops in Western Sydney and other areas and yet city-wide medians rose, why?
The reason has been that some suburbs have benefitted immensely whilst others have stagnated or dropped.
The suburbs which have benefitted most are the ones I call the "aspirational suburbs" ie the ones that people have long aspired to live in (not invest in but LIVE in).
This has been happening since 2003 and is quite different from the period of 2000-2003 where we had more widespread growth. The widespread growth was driven by a mixture of low rates, first-home-buyers subsidies, and property investment.
This led to high prices and low rents (due to over-supply of rentals) and made the share market far more attractive to investors, hence less rental properties became available since 2003.
However, the aspirational suburbs boomed because of new found wealth from (a) property investors cashing in and moving to Knob Hill (b) new share market millionaires enjoying the spoils of their good fortune.
What I am alluding to when I say 2009 - 2012 is that renter suburbs will boom. I have a particular interest in Elwood and St.Kilda here in Melbourne and in Adelaide I am in my early stages of discovery but favour the northern beaches around Semaphore and Largs Bay. In Brisbane I have the horn for Newmarket and New Farm.
Now the bit where you said "But while on the subject of the late 80's property boom where property prices doubled, what happen afterwards?????? Property stagnated for 10 years which is the period it took to return to the historical growth trend line."
Absolutely. No argument. What a time of opportunity hey? What made property get out of that slump? Three things. (1) Lowering interest rates (2) Great rental returns (3) An exodus of money from the share market post dotcom crash.
Look at what's coming in 2009 1) Lowering interest rates (2) Great rental returns (3) An exodus of money from the share market.
See?
I know you are saying that this time properties are way too expensive but that is exactly what was said every other time.
In the words of Peter, Paul and Mary:
Oh, when will they ever learn? Oh, when will they ever learn?
