Sydney remains the most expensive market as to comfortably afford Sydney’s $1.47 million median house price, a home buyer would need to earn $290,926 a year, according to CoreLogic.
In Brisbane, Canberra and Melbourne, buyers would have to earn over $180,000 gross annual income to comfortably afford the median-price house in those states.
By comparison, households require an income of just over $160,000 to buy a median house in Western Australia, which costs $818,839.
....that's more income than most households could muster.
....lowering interest rates are just going to make house prices go higher, and not helping the situation.
....soon the banks will have difficulty achieving growth in home mortgages when income can't keep up with rising house prices.
...but every time we think house prices would fall when the economy tanks (like 2008), we get blindsided because they don't or don't fall notably.
...Why? Because majority of home owners other than those under mortgage stress belts don't feel compelled to sell, unlike stocks, as they need a roof over their heads.
...so when the economy tanks, interest rates will decline substantially but offsetting that positive is rising unemployment and home prices stay largely unaffected.
None of that helps housing affordability - free market can't make that happen.
2008- retirees sold houses when subprime hit in US, to put proceeds into super for tax benefits provided by Costello and got burnt in equity funds, while property went on doubling from there
2020- covid driven depression like economy did not crash the housing market - rental shot through the roof instead, while equities crashed
A major advantage that houses have over equities - no Mark to Market.
No one comes to you telling you your house is down -20% this week. So no panic. You sell only because you had to or forced to.
