I have recently sold a property and decided to rent. The reason I did so was simple, for the price I received for my property I could rent it (assuming no rent increases) for c40 years. I think the chances of a property correction in that time are better than average
What concerns me most about the property always going up argument is that one can make all the arguments about supply / interest rates etc etc but the bottom line is that someone has to pay you more for the property than you paid for it.
When I look at the cohort who will likely be buying their first homes in the major cities (where the jobs are) I see people aged 25 - 35 with low paying jobs, no assets and no wage increases likely. Unless they have rich parents or a bank will lend them 15 - 20x their income they just will not be buying. At the same time, their cost of living is far higher than for earlier generations at the same time in their lives and with real interest rates less than 0 and taxation on interest, saving money for them means going backwards.
I am not talking about no hopers either, but motivated and well educated people. Literally every single dollar they have goes towards commuting, eating and rent. Most of them don't even run a car as the cost is deemed prohibitive.
The days of the babyboomers paying 3x gross income (single) for a house and enjoying hyper-inflationary gains seem to be over to me.
At the other end of the demographic scale we have a large and greying population to support. Who will be paying for them ? Thats right the people who will be at the age where they want to start families themselves and presumably buy houses. IMO.....aint going to happen without substantial tax increases.
I would be more than happy to hear a reply from any younger posters who think I am off on this or whether my observations are correct.
The flaw in my argument is that as a nation we decide to sell all our residential property to foreign speculators and sell out a generation or 2
