And that same world famous economist also stated that the real return on property is quite unimpressive as you have shown in your graph, with one exception you are forgetting to mention. The study, mostly talking about america, has a few key pointers
-averages the prices only on houses that have been bought and sold and recorded, if a house hasn't been sold since 1900 it will not impact the return on housing in the study. a point to consider, just because it hasn't been sold doesnt make it valueless
-american market has a lot more fluctuations than ours, as note by Shiller
-there are a lot more major cities in america that are affordable to average income earners, in comparison to cities like NY. 50 odd states with multiple business centres means more affordability, versus Aus where we have 7 states and 2 business hubs
-america differs in the fact that there are many states, even today, that have declining land values! we don't see that around australia
-tax and ownership laws on US property is vastly different to ours, historically and at present
-WWI & WWII had a much larger effect on the US economy
that Australia graph may be nice to show and say but hey we only get 1.2% return on average in Aus, thats complete BS. disregard the time factor or not, it is wrong to insinuate that. you need to compare apples to apples, such as melb and sydney.
that is, according to Shiller, there is large correlation between major cities (NY, London, Tokyo, Melb, Syd, Paris etc.) and that their prices move together over time faster and higher than other cities. you can't look at the average Aus or US return over 150 years and believe it is really that low, because it is comparing apples to oranges as Shiller himself mentions.
it is correct to say that in non major cities, US and Aus, property values have not been the best investment decision, look at regional areas where property prices are stagnant, clearly you wont be doubling your money every 10 years or even beating inflation, hence little investment in terms of property in these areas. although, compare cities like NY and Tokyo and Syd and Melb, then you will see what people mean by solid returns, not doubling your money every 10 years, but greatly better than a measly 1.2%, land in these areas have been hot for a long time and are still in high demand
Aside from key cities which have been correlated over time (NY, Paris, London, Melb, Syd, Tokyo etc.) you would be correct, the remainder of the countries or the less desired areas
