why housing is now unaffordable, page-20

House prices will fall soon before too much longer and quite a bit.

Anyone who thinks its not overvalued is living on another planet.

Since 1999 housing has almost tripled in value.

Since 1999 wages have kept going up at a normal 1 – 3% P.A

Cost of materials also have no increased in this amount.

Which shows hosing is over valued as how can you justify the price?

People who think we are running out of room is also dreaming, we have the same amount of people in AU than USA has in 1 city. And Australian population increases by about 1% P.A

House boom started right after GST when the big first home buyers grant came in, this sent prices sky rocketing, and since then everyone has been buying investment property to jump on the boom. And still today people are doing this. Just like a stock on the stock market, slowly getting very overvalued.

Problem is, this push’s inflation up, which leads to obvious problems, inflation climbs because everyone charges more to have more money to pay their mortgage.

RBA stops this by upping the interest rates stoping people spending, and most people have brought the biggest house they can afford without thinking that interest rates will climb.

As rates climb, people will stop spending on retail etc, retail jobs and factory jobs will get hit first. More people become unemployed and cant pay their mortgage and banks start selling on them..

In the next 1 -2 yers worth of rate rises, watch how many shows will be on TV like 60 minutes and Today Tonight with people who are forced to sell as they are living past their means now.

This will start to flood the housing market with homes available to buy, and just like in the stock market, when its full of sellers and not as many buyers the price comes back down.

I think it will be realistic to see a 30% + drop in house prices due to the number of investment properties out there and people who have brought too much.

Seems to happen at the end of each decade going back to the 50’s