Can property prices outpace wage growth?

Well perhaps . But there are other ways to do thing for those who have the money, serviceability and risk tolerance. Tbh relying on CG from day 1 scared the Sheet outta me. I always felt I needed to be able to take control and try to add value to whatever I'm buying. I have no idea how people nowadays on low incomes will build large portfolios unless they are able to add value in some way. Mission impossible almost.

 

How is that relevant to paying of a home loan, or is it about trying to confuse everyone.

 

People like you and I and I'm sure some others here - with larger asset bases, larger incomes and plenty of yield /maturity to our situations , aren't in the same situation as those starting out or with lower incomes and less mature yields.

When the OP asks whether property prices can continue to outpace wages, that's a question that is has to be answered with consideration to the whole of the borrower market., not just a smaller percentage of higher income, higher net worth borrowers like you, I or others. We ( a minority) arent going to move the markets en masse. The majority need to do that... and when they are dealing with contracting $$$ power rather expanding $$$ power and increasing Holding costs rather than consistent holding costs, that is problematic.

That old saying about a rising tide lifting all boats... the borrowing power tide is going out now, not rising. The only thing rising with absolute certainty is holding costs as loans revert to P&I

 

How a 28-year-old investor used Uber to help him buy six properties

 

One recession and he is just another bum living on the streets( or back with mummy and daddy) , that had a enormous amount of debt with no real savings. Making easy money when interest rates were going in the other direction, and everyone else was pouring money into real estate was the easy bit.
Trying to keep hold of it when interest rates start going up , the banks turn of the supply of easy money and most investors are slowly being pushed into P&I, will see who is swimming with no clothes on.
Throw in an election next year with a 50% chance of negative gearing disappearing , the U.S aggressively raising interest rates, and a trade war going on , doesn't really give me much faith in the aussie economy that cannot raise interest rates because of flat wage growth and really ****** consumer spending.

 

Yeah fair comment and probably a bad choice of words, but how would these guys go with a recession and no real savings, at some point its always going to happen and a little bit of equity does not help you to much when every one stops buying and property prices go backwards.
The last major recession saw something saw like 25-30% of investors walk away, and that was when rental yields were well over double their current levels,and IO loans were non existent.It also got rid of a lot of the poorly performing debt and set the country up for a long time .

 

Just pointing out how narrow minded some people are. 20 years ago if you explained uber to a taxi driver they would say you are living in lala land. Read previous posts if you don't get the context.

What I have correctly stated is that 4 mates could get together and buy a house in a unit trust. It was claimed that each unit holder would be jointly and severally liable for every other unit holders debt. That's completely wrong. Who is trying to confuse people?

 

Of course if you could figure out a way of making a buck out of it you would be flogging it like regional dual occs.

I won't be responding to any more of your posts. I pressed the mute button on that noise.

 

Who said investors have no buffer? That's your assumption, not a factual statement

 

fantastic. I'll let you know when I need a babysitter

 

"Sydney is growing much faster than this, averaging 1.8 percent per annum for the past five years. It will add almost two million to its population by 2037, which is the equivalent of adding a new Perth into Sydney."​

That can't have an impact on property prices

In 20 Years The Average House Price In Sydney And Melbourne Could Exceed $6 Million

What do you reckon @Leo2413?

 

To be totally honest I don't think much about all that stuff. Since I started investing at 18 to now 36, I've never had trouble finding/creating/putting deals together and I have done well. I'll just keep doing the same as before. I'll leave the economic stuff to the experts while I focus on making money.

 

I find this interesting:

"As the property market changes and evolves, so too does home buying and ownership trends.

In response to the rising property prices in our capital cities over the past few years, alternative pathways to home ownership have developed and are becoming more prevalent."​

What will happen in the next cycle when an ordinary property becomes out of reach for an ordinary family?

Here are the eight emerging pathways to home ownership, as identified by CommBank.

1. Collaborative buying
2. Communities in common
3. Group loans
4. Joint ventures and syndicates
5. Guarantor loans
6. Crowd housing
7. Staircasing
8. Guesthousing

Emerging home ownership trends in Australia

It's interesting the article states Staircasing "is new to Australia, but currently operates in other countries". We have shared equity schemes in WA that are very similar.

Shared Home Ownership

 

Like houses and granny flat builds in Sydney. I've come across quite a few people doing this. Parents live out back in the granny flat. They are close by and can help look after the grandkids while their parents both work full time.

 

That would work well for some. Borrowing power is increased but the parents get some privacy and separation. I think I would rather that than all living in the same house.

In Perth, in some areas you can buy a house and build 2 single bedrooms dwellings out the back. One could be occupied by an extended family member and the other rented out for income.

 

I sort of personally agree with both Euro and Perthguy.

I agree that finance being harder to get will have an impact on the ability of prices to increase and people’s abilities to buy.

I also agree that we (the Oz buying people) tend to find a way to purchase if we really want to... and will innovate. Things we haven’t even thought of yet will affect property prices.

In reality It’ll probably land somewhere in between Armageddon and la la land.

I reckon a rental crisis is on the cards IF people simplay can’t access finance.

Yields to return to higher levels seen in the 90’s perhaps?

After all with a quickly rising population... people have to live somewhere.

Just my simple thoughts

 

In reality, there may not be a disruption in the next 20 years. Who knows? I don't think the smart would rule it out

In terms of whether it can be done or not, it already has been. Brickx is residential properties bought in a unit trust where investors can buy and sell units (called bricks). It hasn't taken off and it may never. But it shows this model is possible.

How it Works | Property Investment | BRICKX

Next, change the model so that one owner gets dwelling rights and it's a completely different ball game. Whether people like it or not, it's a possibility even if considered unlikely at this stage.

 

That sounds sweet! Which council areas allow that?

 

I think this idea is a bit silly though or I don't understand it fully. You don't have control over the property and can't leverage against it. So none of the advantages of traditional property investing. Plus you have limited liquidity as compared to say shares.
Why invest in this when you can just buy shares ?