Lets put this article in context and highlight some of the...

Lets put this article in context and highlight some of the comments so we get a truer picture of what the renters and property bears are pinning their faith on.

HIGHLIGHTS

House prices have responded, but it's been relatively muted, with home values rising by annual rates of 4.6 per cent in Sydney and 2.1 per cent in Melbourne. This has occurred despite auction clearance rates building for the past year or two, a sign of stronger confidence. So why the relatively soft bounce in prices? .

The bottom line?

We are far more reluctant to bid up house prices today than we have been in the past, even though debt is very cheap. Therefore, economists say, don't bank on blockbuster capital gains of years gone by.


So even by their standards Home prices in Sydney for example have been relatively muted (relatively soft bounce)by annual rises of about 4.6%. So even if we don't get the blockbuster capital gains of the years gone by....they don't talk of drops in price but a muted relatively soft rises of about 4.6% per year.



OK lets ow put this in today's perspective


Lets say average price of Sydney home of $1M

4.6% of $1M is $46K
To rent a place in the $1M bracket lets say $1K per week


so someone who owns this home is in effect $46K+$52K = $98K tax free dollars per year better off than the average non owner and still has the benefit of enjoying that warm fuzzy feeling of owning your own little space on this earth.

Now lets look at this one step further.

$98K tax free is about $160K+ before tax earnings not counting all the costs associated with work.....so someone would need to earn in excess of $160K a year just to keep pace with the relatively soft rise in home prices and the owner who doesn't even need to work lol

Now you can clearly see why the poor get poorer and the rich get richer....this is the economics of life so better get used to it as it isn't going to get better no matter how much the renter hopes it does.