‘Craziest’ market in 30 years: the impact of the global housing boom

Yup, and in that time interest rates have been dropping lower and lower providing a huge tailwind. Dont confuse noise with recognising reality.

 

The reality is most people retire on the poverty line. You either invest with a fighting chance to improve your options come retirement or look forward to a bleak retirement. If you're renting when you retire, you're doubly phcuked. Don't wait for your ship to almost sink before taking action. At that point, its all over by the shouting.

It (wealth creation partly via real estate) also allows you to leave/start a great legacy for your kids if you have any. The world is getting harsher and harsher. Kids who are left a legacy PLUS build on it with their own accomplishments and hard work will be set for life.

 

Growth of both asset prices and rental prices is driven by supply and demand. Intrinsic value plays no part. If there's ten nice rental homes available, but only one person who wishes to rent them, then they are all competing for the same tenant. The tenant will select either the cheapest one, or the one that is nearest to what is valuable to them. It could be lifestyle, family or work. On the otherhand if there are ten tenants and only one nice rental property available, then the demand outstrips the supply and the price goes up.

It works exactly the same with the price of homes. Interest rates are at all time lows, so that even though asset prices have increased, affordability has increased as well.

So, even if you don't want to invest in your future, at the very least, it is wise to purchase a home as a PPOR. As @Sackie said, I'd hate to retire without owning a home, especially if I were a single age pensioner.

 

probably will but I reckon make hay while the sun shines. Window of opportunity here to jump in on the rise, could even flip and not get your hands dirty in this market

Word is 2024 interest rate rises, still coming from a very low base. Only thing is market sentiment will probably change.

 

Yes, but easy lending creates demand at a higher price point as people can borrow more. Thats why capital growth has outstripped rental growth (rent growth reflects real supply v demand). And of course higher debt driven growth leads to fomo hence we have far greater number of properrty investors who add more demand.

 

I doubt rates will rise much if at all from 2024. Every debt binge creates a new lower int rate ceiling that we cant go above without a meltdown. The real question is how much they can do to manugacture the next boom eg drop rates even further, negative rates, 50 year mortgages etc.

 

It hasn't outstripped rental growth everywhere. And as for greater number of investors, I believe you may be mistaken on that as well. Since Appra raised their heads a while ago, many investors are snookered, and although they can afford to buy more, they no longer have the serviceability. There's a lot of FHBs and upgraders out there creating a lot of demand.

 

Tons of these folks.

This boom is not investor led.

I have always said folks have moolah and buying power from a variety of sources .When sentiment changes, the money will come. Regardless of IR, APRA, DTI rubbish etc.

The major flaw is many people think buyers are limited by PAYE income. WRONG. Big mistake to assume that. As this boom has proven.

 

I cant see Syd hitting $2m median

Eventually affordability will kick in

 

true
But as prices rise affordability and that chestnut servicing debt will come into play. If u cant source loans you cant buy

which ever way u look at it booms dont last forever

 

Would you consider buying in this boom cycle, not necessarily Syd/Melb but markets coming off from lower median. Where there is less risk as rents practically cover the debt
Take advantage of what is happening??

Did this with my daughter, closed on a property in Perth in June close to cbd at $635,000 I think its easily worth $700,000 today, kid you not. No/low stock

Perhaps u could look at doing this????

 

Im talking 25 year time frame here ..... there are lots more investors now than decades back even if there are ebbs and flows along the way. But agree, the last 2 years has been largely home owners armed with low int rates, but investors coming back into it i think.

 

Ditto....a lot of ignorance that real estate will always perform. It happened in Perth for 7 years.. can happen to Sydney or Melbourne.

 

Yes. Was looking in brissy last year but wife was not working so couldnt borrow enough, and now wife back at work its 30 pct higher not so sure.

 

If that happens in the next 4 years...then be very afraid

 

But it wont

 

get in there and search, review the Brissy boom thread. Also look at major regional centres

this could be an opportunity to create wealth. Brissy has been flat for years, now its booming, its not too late for you to create wealth, plenty of steam left imo

 

Maybe but if it doubt I will be in a life boat a lot of young will be sitting on the Titanic.

Lots of people buying because their nona told them property in Sydney never goes down.

 

I don't know anyone who believes property never goes down in value at some point. Not a single person .

 

Yes
Just got to take advantage of markets when rising

Its weird how some investors have analysis paralysis and then finally get the courage and jump in at peak. I think we have been around the block a few times