We have visited this subject before.
The costs of an average new home in our city,s, or a second hand one.
The amount of debt people take on just to own a home.
Interest rates are likely to go even lower, does this mean bigger Mac Mansions, bigger debt?
How long are interest rates likely to stay low.
What will be the effect of say higher rates and stalled wages if the world economy continues to struggle.
Home owner ship in Australia, near city,s at least, is getting very much harder.
Will the Bubble bust, if so when.

The biggest challenge I see for housing will be the governments tinkering with Suoer, whereby they are considering outlawing lump sum payments, in favor of a weekly pension instead, much how it should have been from day dot.

You see nowadays, many will continue to borrow, knowing they can pay out their loans with their super once retired.

Similarly, one can borrow from their bank, say a 30 year loan, at age 40, as the banks know the loan can be paid out.

However, if super changes this way, lending may well tighten, esspecially the loan terms, which in turn will increase repayments, which by the way is what affordability is all about.

Interest rates in my view are less important and, the bank chooses whether or not to pass them on and, they can also put them up at will.

I know of no plan, no thought, to change super that way, yet.
We can before retirement use some super as a deposit.
But this problem stands apart.
No matter the fate of the mining boom, maybe even a return of the GFC, housing borrowing is a danger .
Saw figures and will look to post them if I can find them, saying our housing prices are, by comparison higher than America.
If we remember America found trouble by lending, under a different system, to those who could not pay.
Here the house and loan stands in default cases but every default sees less value for the house, after a tipping point is reached.
Unnoticed by most, houses have been repossessed for 50 years.
But not in the numbers possible if things go wrong.
Safe as houses? maybe for some a re think is wise.

My strategy was to keep buying up houses/land and at one stage I held ten properties.

Unfortunately an accident meant that I had to sell half, however, my wife's and my strategy is to hold all until one reaches sufficient value to pay out our borrowings, so it's a waiting game for us.

My tip is that prices will rise, as corporate debt is at an all time low and, the stock market is risky given the uncertainty of the economy.

Investors will continue to invest, as negative gearing is a better option than tax.

Furthermore, the less affordable houses become, the demand on rentals grows and, as long as governments assist with rents, property (residential) will continue to be a safe investment.

As for changes to super, watch this space, as a change here may well see more investors entering the housing market, as holding onto cash may well become an unattractive option.

http://www.propertyobserver.com.au/residential/as-the-australian-housing-bubble-bursts-prices-could-fall-a-lot-further-than-people-expect-steve-keen/2012053054914
An interesting link link.
One of many if you goggle Australian housing bubble.
Rechtub your plan once, maybe still was/is a plan for wealth.
Renting those houses you would think, as it always has been , is a sure way to profit.
But our market is much more complex than say the 1970,s was.
Overseas buyers owning big portfolios.
And new arrivals buying at big prices.
While it would be against history, and note my link is from May this year, I think prices may fall.
Housing investment is not exclusively in the hands of Governments.
No investments I know of is shock proof.
China seems threatened by thousands of empty buildings including one room flats.
I will post more links, but any single investment that puts all the eggs in one basket must remember the internationally trading world can impact even on this country.

http://www.smartcompany.com.au/property/049478-abs-figures-show-australia-s-housing-price-bubble-is-bursting-steve-keen.html
I get no joy in posting such links.
But in reality we face a near certain busting bubble in housing.
Our Lucky country may well find the negative side of the mining boom to and soon.
Our high dollar has forced manufacturing off shore and even to a stop.
We, for this harvest at least, before the returning drought, may do very well out of grains.
But as our dollars value falls, over all a good thing in my view, investors may bring about the over inflation too fast.
Winners will be found, but too great loss as our housing follows the developed world, and busts.