Volt would you describe AUS hosing as a mania (akin to the Dutch and tulips perhaps)??
Seems to me that the herd are in a buying frenzy, afraid of missing out. This is all further hyped on popular television networks. It does have the characteristics of a debt fueled bubble.
The Herengracht Index which is the oldest property index with data from 1628, shows that property moves in a 80 up and down cycle. Currently we only have generations that have strong belief systems that prices only go up and its a bet safe as houses! I remember my grandparents telling me as a child about their friend that lost money on a house he invested in. That would be heresy if spoken today. Gen Y would laugh if you suggested prices could go down that their parents and most grand parents have reinforced their own observation that you cannot lose money buying a home.
Australian Houses are 2.5 times in real terms the 1986 price.
We have 9 of the 10 most unaffordable housing markets in the world. Vancouver is the other.
Historically Australians pay 17% of income on housing. Currently 45%.
The only other thing I think of was houses in Gold. Lets use gold in 2000 when it all started. USD around 250 /oz and now around 1200/oz. 1200/250=4.8 times. So if we divide house prices in 2010 by 4.8; perhaps they havent go up at all?
Heres some charts anyway.
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This suggests soon those two curves must meet and the game will be over. Debt fueled bubbles cant keeps exceeding real incomes forever.
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as bad as the US?
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