"What the numbers actually show is that property prices have typically doubled every seven to ten years, but only since the mid-1970s. Over the previous seventy years house price growth was broadly flat. There were periods of price rises and periods of price falls"
So..it's worth noting - 1900 - 1970 nothing much happened growth wise (in real terms).
Then .. 1970 on we had huge wage increases around the Whitlam years and also a few years from the early 70's to late 80's where we had high inflation - in some years 10% plus inflation rates.
So the current Melbourne market could be viewed as a 40 year bubble in the making ? .. certainly a fair bit of the price rise in recent years has been debt driven as debt levels have reached unprecedented maybe unsustainable levels plus we had the government with their stupid first home owner grants - fortunately we're clamping down on foeign ownership now - about time. Hopefully first home owner grants will be scrapped next.
Affordabilty always relates back to median wages vs median house prices and also net rental returns... in a lot of ways it could be argued that house prices (in Melbourne, Sydney ,Perth etc..) today are 100% plus higher than where they have been historically and where you'd expect them to be logicaly. so there are some danger signs ahead - in the meantime the banks are offering depositors higher interest rates. interesting times ahead - hopefully more sensible too.
