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Home ownership - dark side of the boom : Comments
By Kim Carr, published 1/11/2006It’s official - home ownership is less affordable than it has ever been before.
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Posted by Col Rouge, Saturday, 11 November 2006 4:24:50 PM
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I guess my great-great-great-great-grandchildren might get to see them then?
Spider, from your posts I can only assume you represent the manana party (as in the song).
In the meant time, the rest of us will just get on with life, lacking the benefit of your illuminating policies.
China, I figure, despite your warnings, we will never become as authoritarian as China, which has come so far in the past 15 years (or so) from where it was under the repressive and stagnant Maoists.
The thing with China is, it appears to take things very slowly. On balance such a conservative approach to civil liberties might be better than the path which transpired in Russia. (The fable about the tortoise and the hare flash before me).
Fester – I have not a clue who “Harry Triguboff” is. I was commenting on the observed reality of the “affordability calculation” on house prices.
Migration policy will effect the “demand” side of the calculation, likewise, as Rex brought up, so too bank lending policies as well as land reservation strategies of government and building codes and employment rates etc.
Someone commented previous about the hike in Perth prices – well, did that person bother to ask if people are earning more than they were a few years ago because of the resources boom in WA?
Affordability has been, for decades, around 30% of gross income, give or take 10% (=3% on a base of 30%).
Because the business of buying and selling a house is not undertaken as quickly as the RBA can change official interest rates, allow a lag of around 6 months after an interest rate rise before its effects are reflected in house prices.
The danger I see in the current trend in interest rates is, the higher they go, the closer we come to having an interest rate lead collapse in consumer confidence and thus, a recession