Why do some of you always compare the value of houses to the median income levels???
I really don't get this at all.
They have no direct reason to be compared....the market dictates the value of houses not income levels......as is living proof right now.....don't u get it??
For starters..... around 70% of current homeowners owned their initial houses well before the boom and have plenty of equity so a few interest rate hikes doesnt do much , tightens the belt but thats about it.
And the ones that cant afford their now second investment house that they used from the equity of the first come in and sell and smart investors buy them.
The only ones to fall over are first home buyers who bought at the boom height and on 100% LVR's and paid top dollar for the house......and the new homebuyers trying to get in....who cant.....so they drive up rent prices.....again a win for the property owner.
And the first homebuyers......as others....say well we will buy when rates come down.....haha......when rates come down property prices will go up....not down.
Plenty of older folk with very very low LVR's........plenty with equity....plenty with cash to buy other property.......plenty of immigration......a mining boom......high inflation meaning we have been spending so obviously not struggling.
Some of you are just brainwashed souls.
Please think about this line below for a second....
BUY WHEN RATES GO UP, SELL WHEN RATES COME DOWN
You can generally buy houses cheaper when rates are higher and will sell the same house for more when rates are lower.......
For some of us its just so clear.....
Some of you will understand this, others may need to think a little harder.
So while rates are going up.........like they are now......im buying wherever I can see a good price that yes is sometimes lower than 12 months ago or someone that "has to sell" pops up.
Interest rates will start to drop next year.....and unfortunately some will believe the media and have sold at the wrong time but thats life.
As the heading of this thread....Will property increase by 40% over the next 5 years....??
Yes of course they will in some areas and not in others.
40% over 5 years is not good.......I look for at least 15% p.a so the 40% to me is well under.
So to finish, buy when rates are at their highest, just like now, no better time to grab yourself a nice priced place.
No point buying when rates come back to 7-8%......by then everyone will start buying and u want to be in a position to start selling if need be.
Anyway good luck all.
PS.....my properties are all up 6% this year alone.....in 3 months.......so 40% over the next 5 years is a sure bet.
