interest rates down over the next 12 months?, page-34

"I think if you did a poll right now about whether people consider housing to be affordable, I am pretty sure the result would be different to your opinion."

Hi Andrew

Firstly, it wasnt my opinion, but that of Rismark International.

Your now saying the IMF state AUS property prices may be 30% overvalued which is a little different to what we were talking about.

So we are now talking about two things.

What is the true income v house price....and are house prices overvalued?

Consider this.

Over 40% of all property stock is not in capital cities.

So while yes the median or ave house price may be 400k or 500k......the majority of these propertys take up the pole positions in capital cities 5-15kms out.

To be honest with you, I wouldnt say the "average" type of person fills this area.

You have the very wealthy and affluent rright down to I guess average within 5-15kms.

But start going past 15kms, the "wealthy" portion of dwellers then dimishes quite rapidly.

This is why we talk about vrious sectors of hosuing, which makes it hard I guess to talkj about the "ave" and the true average.

Yous ee the average for inner city is much diff to the ave for outer suburbia.

The proof for me comes quite simply from the fact people are still buying houses.

late 2003 was th end of the boom and has been relativey flat since.

Not until 2009 did we start to see the boom start agin.

So to me the boom has just begun, wages have caught up ovr the past 6 years and now agin property prices are taking off.
How long that lsts has many deterinf factors mainly serviceability , interest rates, unemployment rates, demand, rental costs, tax incentives, new infastructure, wage growth, population growth, population age, sectors of employment growth, weather, housing dynamics, and I could go on forever.

We have less than 1% default rates so this again tells me 99% can afford, or are forgoing other leisures and are paying their mortgage.

thanks