Jessica Irvine of the Sydney Morning Herald says there is no housing bubble.
Less sophisticated bubblers simply compare the rise in house prices over the past few decades to the rise in wages to make the ''overvalued'' claim, pointing out that the former vastly outperforms the latter.OK, but what happens when it's time to sell? $402 will get you this in a distant Sydney 'burb.
But this overlooks the historic boost to household borrowing capacity that occurred in the 1990s with the halving of nominal interest rates. This, in effect, doubled the amount households were able to borrow against a certain income. The relaxation of lending standards by banks in response to financial deregulation also increased the amount banks were willing to lend against that income. These two factors are largely responsible for the increase in household debt between the mid-1990s and 2000s.
Most of the population is concentrated in a few capital cities with often marvellous water views.This is the marvelous view from that $402k house. A nice view of graffiti and clotheslines.
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Think of your budget and what you are looking for in a house and do the math (h/t iamfacinganap for spotting this property).