Redmond, thanks for reading only some of the post as it seems that the other points you rasied werent that important in the first place.
but to help you understand. Many parents have worked hard to make their childrens lives better. One of these is helping them buy or build their homes. Buy doing this, you have situations were FHB borrow what they can afford, ie average is $215k, and mum and dad put in the restsay 300k. given dad is hand he builds it for them. so for $515k, they end up with house valued at some $650K plus.
You ask how many parents can afford. I know numerous kids who earn an average, yet live in houses many times over the average. this is the wealth effect I refer to that your simplistic chart doesnt reflect. Explains the 50% increase in mortgages, while houses went up 100%.
But redmond, please read the whole post and please refute any comments made particular the banks that are loosing money. cant wait for that answer.
As to the value of property in comparison to FX rates. You were referring to immigration and their wealth impact. Pointed out that the AUD has dropped significantly and from a foriegers point of view houses in australia are very cheap for them.
And yest the recission is a concern, but I hope the stimilus packages do minimise impact.
It seems redmond that you are putting all your eggs into a single basket based on your chart topped off by a profound receission to allow you and your friends to buy a house at a deep discount. The lower interest rates are stopping the falls by making affordability the best it has been for 5 years.
But I looked at your chart redmond, if you followed it to the rule you dshould have bought in the late 90s when the average was below.
But alas i aint that smart I just bought what seemed a good deal at the time.
