I would agree that Sydney prices are up there and units will probably come under pressure in the next year or two .
However , you make a couple of other points that are interesting .
You mentioned that you paid the same price in 2008 that your neighbours paid in 2001 . People forget that Sydney real estate was very flat through that period and I think it's likely to repeat that cycle . Just like the previous period , prices may not increase for another seven years . So , short of some big hiccup , I think it's business as usual . People always over extend themselves . The banks have recently taken steps to reign some of unit stuff . Fortunately that has been done well before there is an uptick in interest rates .
Interest rates are likely to stay low for a while longer so while people have big payments , they shouldn't be under pressure in the short term . Also , for those people like yourself that bought in the last few years , your interest rates have dropped quite a bit . I hope all those people are smart enough to take advantage of that little bonus . There should be many of those people that are actually well ahead of their payment schedule .
If you have bought an apartment in the last few months then you are probably at the top of the cycle . Not the first time it's happened and definitely won't be the last . But , unlike shares where a property is a long term investment for most people , the cycle becomes less important . The important thing is that you have the capacity to make the payments .
That's an interesting statement you make about the bank owning your house . Of course you are right about that , it's nothing new . I hope you haven't just figured that out after buying your house 8 years ago ?
Even if you never pay your house off , in the end you will have accumulated wealth provided it has increased in value . If it doesn't increase in value then you have effectively been renting it .
That isn't a new concept .
