good analysis by someone who knows, page-24

He is deliberatel playing with numbers. He's talking about a housing bubble in MELBOURNE, yet he gives the compound annual growth rate AVERAGE accross the ENTIRE COUNTRY was 6.8%..

Not too bad eh?

Yeh, but all it is simple statistical trickery and lacks relevance.

Now here is more relevant statistic for the topic of a Melb housing bubble

-House prices in MELBOURNE went up 20% from DEC 08 to DEC 09.

-House prices in MELBOURNE went down 3.2% from DEC 07 to DEC 09

-House prices in MELBOURNE went up 18.1% from DEC 06 to DEC 07

-House prices in MELBOURNE went up 8.1% from DEC 05 to DEC 06

So there it is folks, MELB OURNE house prices are up 43% since DEC 05, and I'll put my nuts on the line that the next increase from DEC 09 - DEC 10 will be 10% PLUS which will means more 50% increase in the past 5 years for house price in Melbourne.

So what does that mean in terms of affordability? Lets have a look.

A $300,000 in 2005 would now be worth $444,809 in DEC 09. That figure will likely be $500,000 by DEC 10.

So what have wages done?

Nov 08 - Nov 09 - 4.9% wages growth
Nov 07- Nov 08 -4.1 % wages growth
Nov 06- Nov 07 - 3.8% wages growth
Nov 05 - Nov 06 - 4.4% wages growth

That means those earning $40,000 in 2005 would in Nov 09 be earning $47,335
(countrywide all employees)

Wages have gone up a meagre $7,335 over the last four years
House prices in Melbourne have gone up $144,80 in the last four years. That figure for house prices increase in Melb will $200,000 by years end (barring a majr collapse) yet wages will have only increased only $9000. And do you think Rudd is magically increasing wages this year by a decent margin? NO.

No wonder people are struggling, no wonder people toss arround the word 'housing bubble' in Melbourne!