"i think declared income levels in bundy are fairly low (pensioners,socsec payments...who knows) and as such it has come out that it takes a 'local' most years in Bundy to buy a house !''
Obviously.
But does this mean ''property prices in locations where the majority of residents are retirees and/or downsizers, are overpriced, expensive and inflated,'' because essentially this is Demographia's implication?
According to Demographia any retirement/downsizer destination is ''overpriced, expensive and inflated?''
In practical terms, however, retirees and /or downsizers are responsible for the majority of the population growth and they move to these locations after selling their properties in more expensive suburbs in capital cities.
So from an investment perspective, retiree/downsizer destinations are not ''overpriced, expensive or inflated'' if more and more retirees/downsizers are relocating from higher priced capital city markets to them.
And thats exactly what has been, and will continue to occur over the following 20-30 years. People selling in Sydney, Melbourne and Brisbane for 600K-800K and buying in a lifestyle city or town for 400K-500K.
If you skim through Demographia's nonsense however, all you read is alarmist tripe. There is no mention of the driving force behind prices in lifestyle destinations-or any other segments of the property market for that matter.
Only more general, maro-orientated and ever-so-boring overviews that do not accurately illustrate the true fundamental drivers of price growth.
Anyhow, enough about Demographia. Any property investor that actually knows what is driving growth in the real world-as opposed to the world of ''analysts'' and ''economists'' who are obsessed with formualic charts-would only use a Demographia report to start a BBQ.
Sorry, as I said I'm only a mug, and maybe thats why I'm still unclear how rents can rise if ''there is such an oversupply of housing?''
You seem to be arguing that rental growth is related to capital growth; that McMansions are increasing the medium price of housing and subsequently rents are rising as well, and that there is a surplus of rental accomodation but Australians are becoming more affluent and thus discerning in their choice of rental accomodation?
Well, charts, theory and macro-views aside, I can say for a fact, that in all the suburbs in which I own houses, and thats a few suburbs, the vacancy rate is presently 2%-3%.
Now, maybe other investors own houses in suburbs where the vacancy rate is 10%-12% at the moment, but I do not know of any investors where this is the case.
So people can rant as much as they like about ''vested interests obscurring the real truth and Censis not acurately reporting statistics'' and so on, but logically, if there was an ''oversupply of housing'' rents would be falling faster than bridges and ceilings in New Delhi.
But rents are continuing to increase.
Supply and demand is the be all and end all. You can argue all you like that ''prices and rents are inflated and/or unsustainable'' but it is not up to you, me or any other individual to decide the ''true value'' of anything.
