Australian House Prices Are Severely and Seriously Unaffordable

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Australian house prices are severely and seriously unaffordable…Pink Monday in the U.S. costs 79k jobs…the decline and fall of consumer credit and its effect on prices…and more!

Stocks in the U.S. were up overnight. The only really positive news on the day was that existing home sales in the U.S. were up 6.5%. It was unexpected news. A lot of short sales and foreclosure sales boosted the market.

See. Markets work if you let prices function. Median house prices have fallen over 15% in the U.S. in the last year, according to the National Association of Realtors. The median price of US$175,400 is obviously starting to clear some of the inventory over-hang. If prices fall even more, you can expect more buyers to come in off the sidelines and back into the market.

The alternative is to keep those new buyers out of the market by propping up prices through various government-backed lending initiatives. If you want to make homes more affordable, you should let home prices adjust lower, to a level that reflects tighter credit. How hard is it to figure out that if you take away copious amounts of credit from the housing market (in Australia or America) prices are going to fall?

But is that such a bad thing? Well, it is if you own a house and have a large mortgage on it. But let’s consider a new study on global housing affordability by Performance Urban Planning. The report concluded that Australia has the most unaffordable housing of all the nations surveyed. Not only that, but according to the report, Australia doesn’t even have a single urban area in which housing is merely “moderately unaffordable.”

Now before you write in defending the honour of Australia’s housing market, let’s be clear what the survey’s designers consider unaffordable. They use a ratio of Median House Price to Median Household income. A house is “Affordable” if the ratio is 3.0 or less. It’s “Moderately unaffordable” if the ratio is 3.1 to 4.0. It’s “Seriously Unaffordable” if the ratio is 4.1 to 5.0. And it’s “Severely Unaffordable” if the ratio is 5.1 or more.

Australia sports a ratio of 6.3, which is both “Severely Unaffordable” and “Seriously Daloob.” New Zealand comes in next t 5.7, followed by Ireland at 5.4 and the U.K. at 5.3. Owing to its large number of metropolitan areas in which there is a wide variety of median prices and incomes, the U.S. nationwide ratio is just 3.2.

Part of the problem in the other countries is that national median incomes and house prices are derived from just a small number of densely populated urban areas. It’s a pretty common occurrence in America to pack up your car, change states, and change jobs. You trade lower wages for a lower cost of living. That may be harder to do in more homogenised labour and housing markets, like, say, Australia.

So is today’s ratio any higher than historically? You bet it is! According to the study, “In recent decades, the Median Multiple has been remarkably similar among the nations surveyed, with median house prices being generally 3.0 or less times median household incomes.”

“This historic affordability relationship continues in many housing markets of the United States and Canada. However, the Median Multiple has escalated sharply in Australia, Ireland, New Zealand and the United Kingdom and in some markets of Canada and the United States.”

There are other ways to measure affordability, of course. But it really comes down to the mortgage payment. Looking at house prices in terms of household earnings and income, then, is the method that makes the most sense to us. And by that measure, Australia has some of the most expensive housing in the world.

In fact, according to the table below, Australia has over a third of the sixty housing markets ranked “Severely Unaffordable” by the survey. Two of the top three “Severely Unaffordable” markets are in Queensland. And eight of the top twenty “Severely Unaffordable” markets are in Australia, according to the survey.

Source: 5th Annual Demographia International Housing Affordability Survey

If you’re in the market for something “Seriously Unaffordable” you should try Bendigo (4.8), Wagga Wagga (4.9). or the goldfields in Ballarat (5.0). The other 24 major urban areas surveyed are either prohibitively expensive, or overvalued, depending on your point of view. So why haven’t Aussie house prices fallen more?

“Unlike the other national markets in the Survey,” the survey surmises, “Australia has thus far been able to avoid material house price declines. It seems likely that, sooner or later, the inherent instability and unsustainability that characterizes bubbles will lead to house price declines in Australia. However, were it possible for Australia to retain its highly over-valued house prices, there would still be a significant cost. Future generations would pay far more for housing than in the past, and Australia’s relative standard of living would decline.”

Far be it for us to suggest that Australia’s love affair with homeownership could be financially ruinous at these prices. Besides, we don’t have to say it when you can see it for yourself in the image below. But the generation psychology of getting rich in property is hard to break. It’s worked for the Boomers. Now everyone thinks it will work. Hmmn.


Source:5th Annual Demographia International Housing Affordability Survey

The other side of the affordability ratio is household incomes. And if the job market data from the U.S. on Monday is a preview of what’s ahead for Australia, median incomes are going to decline for the people who got fired. In the U.S. alone, over 79,000 pink slips were handed out to start the week.

Maybe it will be remembered as “Pink Monday.” Corporations are hoping to stem the rising tide of red ink by slashing jobs. Caterpillar is cutting 20,000 people loose. Sprint Nextel fired 8,000, Home Depot, 7,000. Pfizer is laying of nearly 19,000. And American Express, after reporting an earnings drop of 79%, is sacking 7,000 workers too.

It’s a lot of bad news. But the Amex news shows just how bad things are getting in the real economy. “Our fourth-quarter results reflect an operating environment that was among the harshest we have seen in decades,” Amex CEO Ken Chenault said. Card member purchases declined by ten percent, year-over-year. Amex reported rising late payments, delinquencies, and is expecting larger default rates by its customers.

Do you see what’s happening? Consumers are cutting back their use of credit cards. But even so, they are having trouble servicing their outstanding credit card debt. Households have a cash-flow problem too. They too, are overleveraged and have to reduce the amount of debt they are carrying.

The only way to do that is to cut spending. Thus a double whammy for the retail economy. With one hand, households cut spending, damaging business profits. With the other hand, businesses lay off workers, further reducing household income. And on the cycle goes.

The cycle of rising unemployment, negative earnings news, and recession is obviously a big downer for the stock market. Of course, as we write that, stocks are up on the day. But in a credit depression, asset values fall faster than government efforts to reinflate the money supply.

As we pointed out last week, the value of credit outstanding dwarfs the patchwork efforts of various government spending programs to prop up banks and house prices. We’d expect weaker stock prices, falling house prices (yes, even with interest rate cuts from the RBA), and the build up of a big inflation trade. More on that tomorrow.

Dan Denning

for The Daily Reckoning Australia

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.
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Coffee Addict
Guest
Who will pay for welfare housing if you and I lose our jobs and/or our other income? Not me. I don’t own a rental property. The answer is anyone that does own a rental property (and of course their lenders). Bill and Dan repeatedly argue that market prices will drop to what people living though a long term credit depression will be able to afford. Dan refers to Bendigo and Ballarat. I hope that residential accommodation near the old Victoria gold diggings does well as gold mining in those districts kicks the economy there into gear. Dan also refers to… Read more »
8020 Financial
Guest
Hey Dan great column as always. I have always been puzzled that so many people regard rising property values as a “good thing”. As far as I can see, a house is a consumption item, what else can you do with one (ultimately) except live in it. Imagine how much easier the life of a typical family would be if they could get a house in a reasonable suburb of Sydney or Melbourne for $200,000 or less (about three times median earnings by my guess). What concerns me is that when this bubble finally starts to deflate, the only solution… Read more »
Pete
Guest
CA: Very good points. As for bringing the income from the City to the regional areas, I can only think of two ways: – mobile office – outposted Gov. jobs It’s going to get real messy isn’t it. For a while I have been wondering, what with all the Gov. interventions to save mortgagees and whatnot, whether in the longrun a person would be better off with a house now or not. I understand and completely agree with all the current arguments against buying a house right now. The X factor that we truly cannot predict however is Government intervention,… Read more »
encino man
Guest
Dan is correct ! letting housing drop to a real level of income versus price ratio would be a great thing, but I dont see good old human nature letting that one go with out a huge fight on the part of the real estate industry, they do a vested interest in talking it up ” ( telling lots and lots of lies) they have nice fat commision checks to get, so they are not about to throw out the golden goose. ( I should know as I have a real estate licence) the REI have a stake in keeping… Read more »
Drew
Guest
It certainly will be interesting to see where house prices go. I expect the same direction as employment, down I think its not the direction of house prices that should be questioned but how far down will they go. I expect that the number of houses to market will increase and buying interest to decrease. Just to make that clear that means there will be a shortage, of buyers. Next to be realised will be its not the number of overall people versus houses that determine a market the real supply demand is number of houses on market versus number… Read more »
mike
Guest

Didn’t people originally leave Britian and Ireland because it was crowded and expensive and nobody could afford a garden, while Australia was uncrowded and cheap.

Well at least there’s still the sun I suppose.

beyondtool
Guest
I don’t think a mass exodus from the cities is going to be based on affordable housing in the medium term. Cities have jobs, and if you’ve ever tried to live in a regional center you’d know that it’s hard going even with an average job. I was forced to move from Lismore 5 years ago due to a lack of opportunities to Brisbane. Especially with the impacts on farming and mining jobs. I can’t see people running from the cities unless there are next to no jobs or opportunities, period. Although there is a housing “shortage” in Australia it’s… Read more »
BlackSwans&Economics
Guest
Isn’t it so obivious which way house prices are headed, that every time you see the FHO ads on TV you get angry. To those that say well if prices fall then I just wont sell, thats great but not everyone will be so lucky and forced sales in your area will reprice your home. I found this recent Australian report quiet sobering, here is a summary, I hope its ok to post. Rising unemployment this year is likely to almost double the number of households at risk of forced sale or foreclosure, erasing the effects of falling interest rates… Read more »
Gerry
Guest
Pete….The argument for owning a modest house in the right location when all the investment and market timing issues are set aside (which are difficult and arguable to predict) is that a house is not a piece of paper that may or may not have future value. shelter is a basic necessity.. and yes there will be deflation, inflation, temporary oversupply or whatever. I appreciate these are investment pages and economy took over from community in the bull market, before survival mode now starts to kick in and bring some reality to those who have not experienced hardship.There are better… Read more »
Pete
Guest
Thanks Gerry Unfortunately for some a house is still an investment – an investment of future earnings if you need a loan. How much future earnings you invest in a house depends on how much you have at the moment and how much the house costs. If you can increase how much you have at the moment (saving/investing) and/or reduce the price of the house, then you will rely a lot less on future earnings. As with all loans, of course there is also the consideration of interest rates. Now with our future seeming quite shaky and uncertain, it seems… Read more »
Bertie
Guest

So are Aussie houses overpriced? Will we see a crash????

Pete
Guest

Actually looking at the coloured graph, Sydney was “seriously unaffordable” ever since the 80’s. I have no idea what that means!

Greg Atkinson
Guest
Pete, let me put my old engineering hat on for a few minutes (i.e. pick the data apart) and throw a few things up in the air: 1. I see no point in talking about an average or median price in Sydney. The city covers too much area and there are vast differences in lifestyle and incomes. As demographics experts have pointed out on numerous occasions we need to break Sydney up into a few areas to get a good grasp on properties prices, but nobody seems to do that much. No use trying to find common ground between Hunters… Read more »
Pete
Guest

Hi Greg,

1. Good point
2. Haha, another good point.
3. In a feeble defence of the graph and the strange affordability rating system, perhaps it could be that Sydney’s median prices were unaffordable, and got worse with the credit bubble and all the investment bankers over time? Perhaps Mental As Anything bought up half the properties in the CBD ;)

I’m with you on the property data manipulation…it’s never a clear picture is it. I still find some statistics useful as indicators, but not as ‘proof’.

BlackSwans&Economics
Guest
Highly geared property investors are like rabbits in the headlights, the car is fast approaching but they insist they are as safe as houses. When everyone knows an investment is a sure thing, you cant go wrong, it will make you rich, never loses value, then by its very nature its over bought and over priced. Crowded out.. Just ask anyone, your mum, dad, brother, sister, a stranger in the street, Rudd or Swan, even my working dog knows the way to get rich is to buy a few houses in the big smoke. If you have family living in… Read more »
Ross
Guest
Belatedly appending coffee addict’s comments on Wagga. Dual income was as much a feature of country city/town life as it was in many capitals, welfare migration is another and that displaced older housing stocks leaving the younger generation building in the regional cities where availability of services continues to displace people from smaller towns without industry or mining income over and above farming. The biggest issue I saw in terms of price was the inefficiency and high price to build. City builders just weren’t interested in investing in more advanced pre-fabrication and costs were excessive. Housing prefab technology is one… Read more »
Gerry
Guest

Good response Paul and appreciate your position and logic. A lot of dealers will make money out of gold as the focus continues for sound reasons and hopefully others who invest will time things right.The one modest ideally located house ownership aim was just a way of thinking for those without a house. If you invest in gold be sure you have possession of it.I have seen past scandals.(there are more Bernies out there) A certificate of ownership is a piece of paper too. Just keep it in mind and keep control of your assets.

Greg Atkinson
Guest

Pete..I am with you regarding the property data. I suck it all in and then try and make some sense out of it..if I can.

Paul
Guest

bravo coffee addict. as usual to the point and correct. also i love the use of the word depression, and it is a depression, not a mamby pamby recession. i fear there is much worse to come in the cities, but it does a group on non thinkers good to get whapped on the head for doing just that. personal note to dan, you cant eat gold. :)

barney
Guest

so with interest rates being cut pretty severely, what is going to happen in the next 12-18 months?

With both rents and property prices. Can both fall at the same time?

I have mortgage payment which is below what it costs to rent. would i be better off keeping the mortgage, or going onto the rental market?

(assuming that if i sold the property, it would be for price which yields me a profit(even modest))

Cam
Guest
Hey Barney – I bought real estate based on a lifestyle decision (sick of renting) but to do so had to put the ‘life savings’ into it… there was no thought of selling in the short term for capital gain. But with little savings outside of the house, the prospect of a property crash had me considering selling up, and going back to renting… Anyway, I’m NOT selling up after factoring in the ‘value’ of not having to move home, and particularly if you intend to rent for a period and then buy back in when the investment timing is… Read more »
Pete
Guest
Cam: why will rents track inflation up? I can think of some scenarios that would contradict rising rents: – no rise in wages – market flooded with houses to rent – landlords who can’t afford the capital loss of a house are forced into renting – unemployment forces some renters to move into other rental properties, share housing/consolidated housing – empty speculator houses increase supply(bought to renovate and then sell, not ever rented) need tenants because the speculator does not want to take a capital loss (You may be surprised at the number of ’empty’ houses in Australia. That is,… Read more »
Pete
Guest
Oh and conversely, rents would rise if: – wages rise (is that likely?) – employment rises (more monetary competition for houses) – the cost of living decreases (people have a bit more to spend) I would have listed ‘monetary inflation’ as a reason for rents to rise, but as stated previously, this would not be a correlation unless wages also rose. Typically wages do rise over time, especially in prosperous times and in-line with inflation. However in a recession I do not think that pay-rises are likely, especially with reported inflation to be low (regardless of the reality). In a… Read more »
Benjamin
Guest
I totally agree with Pat. And Barney, yes of course, both RENT and PROPERTY prices can GO DOWN. It’s already been happening in Sydney’s Eastern suburbs and other established suburbs. My investment unit has had offers going down by 7.8% from last year, and yet I’m renting it out to a new tenant at $37/week lower rent than the previous tenant (who’s financing business did poorly last year). The only tenants from whom landlords can squeeze impossible $1,000/week rents from these days, are tenants who do not need to rent anymore. Tenants who were earning heaps, but are now in… Read more »
Russell
Guest
A response to Petes comments about stimuli that could increase rents. Upwards pressure on rents can also be provided by rental subsidies. I lived for a while in Darwin during an era when houses were apparently in short supply, and the major employer, the govt, gave public servants a rental subsidy to offset the price of rents. Of course every time the subsidy increased, because the committee who deliberated these things decided rents had increased substantially, rents also increased again by about the amount of the subsidy. In the correction which is coming, if people are forced to sell their… Read more »
rick e
Guest

I have moved to Brisbane QLD from Sydney and have had problems getting a rental property in QLD around 6 kilometres from CBD, in Sydney I had to drop my rent down and still have had no one to rent it out my house in Gladesville.

kathy
Guest
i’m curious as to the effect all the flooding up north and the fires down south will have on the cost of building and housing demand. More than 800 homes down south and and unknown number up north will have builders and building supplies in high demand for the next year or two. After Mackays floods last year they are still finishing repairs and builders are still hard to get your hands on. If this is going to be a yearly pattern of mass home destruction i think we are going to be looking at a very unpredicatable and strange… Read more »
Coffee Addict
Guest
Kathy. Crooks are attracted to disaster areas like bees to honey. People who are insured will have to go through the insurance companies. Some others will be at the mercy of the shonks. Prefab homes would be a good option in the circumstances. Because the industry is otherwise quite flat, there shouldn’t be any massive price excalations in Melbourne for renovations and like: – but then again it all depends on how the reconstruction is managed. I don’t know about Ingham. Flood mitigation measures can be a lot more expensive and insurability can be more complicated. Traditional Queenslander houses should… Read more »
Nicholas
Guest

Good discussion.

One thing that has crossed my mind is that there has to be a natural floor in house prices because of the cost to build which is unlikely to fall unless the cost of labour is driven down which would be unlikely unless unemployment was 10%.

Bryce
Guest

Pete.

Great analogy re: rent and inflation. I have been pondering this very question for some time. What you propose makes perfect sense.

bravo!

Wally
Guest
Thank you so much Dan for your article. It is so hard to find the truth in main steam media, they should be held accountable along with the banks and government for this mess, ultimately caused by the biggest debt-indunced housing bubble the world has EVER seen. Been living in Vancouver for 6 years and similar situation here, real estate industry and developers own the media, and local and provincial governments; but this has not stopped prices declining upward of 15% (as at January 2009) since May 2008! Seems like Oz has been late to the bubble burst party, although… Read more »
Wally
Guest

Nicholas, I would argue that cost doesn’t drive value but rather rent and personal income. Maybe someone with more smarts can eleborate on this?

Robert Stowasser
Guest
Nicholas, the value of any improvements on a piece of land i.e. a house can be readily valued by a prospective purchaser. What causes bubbles and subsequent busts in housing markets is not the value of the improvements. It is the speculative price paid for the unimproved positional value of the land. Why, as an example, would anyone in their right mind pay 6 million for a small beachfront property with an old shack on it unless there was a belief that the asking price would continue to rise? Things become much clearer when we think in terms of ‘land… Read more »
william johnstone
Guest
We all like to think that we have ‘crystal balls’ and intelligence greater than thy neighbour. In agreement with Gerry’s post on 28th Jan, security and shelter was the main purpose of bricks and mortar since adam revealed what was beneath the leaf to eve. Perhaps these humble perceptions must be appreciated once again? The Jewish original idealogy of take this one sheep and return three within 7days bred speculative investors instantly . Live in your home rent your house buy a home and sell a home trade shares gold whichever works for you in a positive way. Research without… Read more »
Greg Atkinson
Guest
Hi all, I think one problem we have with looking at home price trends in Australia is that simply housing styles have changed so much. This also applies to comparisons between incomes and housing as well. For example back in the 1960’s not all new homes would have had a garage, quite often a basic home was built with a view to adding an extra room when money was available. However if you fast forward to today it is not uncommon for a first home to be 3 bedrooms with a double garage and a family room. So comparing the… Read more »
real estate
Guest
I believe that the single biggest cap on the residential housing market is always total annual after tax income of those in the market for a home. Over 30 years people were either gifted or found new ways top generate higher incomes. Predominantly this meant working overtime and both parents working. After that point is reached then the only way for people to increase their incomes is natural wage growth. Remember I’m talking about the majority here, not those who have a lot of money to invest etc. So if wages cannot keep up with mortgages prices must be contained.… Read more »
rotha yu
Guest
First I would like to quote Wally “If I return before the next election and Rudd extends that stupid first homer buyers grant (and yes, I will be a first home buyer in Oz) then he has lost one vote.” Who should we give our vote to, if all the politician are similar? When they are in opposition, they argue about housing affordability problem, however, when they are in government they tend to do nothing about it. I think this is because the government and the Reserve Bank want people to owe large debt in order to control people’s spending… Read more »
Dave
Guest

We are 6-12 months behind the UK in the property cycle. Look at what happened there, in a similar market that had a “housing shortage … an 18% decline in London property prices over the last 12 months.

But of course that couldn’t happen here, could it :)

Biker Pete
Guest
“I’ll be interested to view a residential market and how it performs without any crutches like the first home grant etc.” Real Estate, 27th Well, Rudd probably has two choices. He can do an ‘Obama’ and try to save people’s homes if/when/after realty crashes; or he can take the smarter option and a.) maintain downward pressure on low interest rates; and b.) extend the FHBG. Easier and politically smarter to do both the latter. I know that won’t please the goldbugs here, but ‘Real Estate’s’ comment about kicking away the crutches to observe how many Aussies fall over is probably… Read more »
Thrifty
Guest
Very nice article Dan. Greg Atkinson, I’m an engineer too, and disagree with your first 3 points. 1&2. I see a point to talking about a median price for Sydney. Even with growth, there would still be expected to be the same distribution of people, from the lower income to the upper income. Thus, measures of central tendency are useful, especially when that median is compared with income. 3. Houses that are seriously unaffordable can still be purchased provided that there is credit. It just means that the repayments are higher. As long as enough other people keep thinking that… Read more »
Dingle
Guest
….an 18% decline in London property prices over the last 12 months…..this is true, albeit somewhat massaged: the fact is a lot of the property drops in London and the major cities are in new build properties that have gone up at a rate of knots, the property market stalls, investors in those new flats panic and want to sell quick so drop the price: it happens. I lived in Leeds which like every other UK city was throwing up blocks of trendy cardboard flats (you know, 200sqft for 400k!), people/developers see the financial system going belly up and panic… Read more »
Greg Atkinson
Guest

Dave, regarding the London property market hasn’t the correction been made worse by the tax hike on “non domicile” foreigners living in the U.K? From what I read the top end property market in London was hit hard by this new tax and this dragged down the average house prices across London. (and I would guess the U.K as well)

Pete
Guest
Russell (8th Feb): You said “In the correction which is coming, if people are forced to sell their homes, which will be likely for over leveraged households where jobs are lost, then the demand for rental property should increase, and therefore so should rents.” I thought that too initially and it made sense. Except for one thing: For every house transaction there will be a buyer and a seller. For these distressed sellers selling at low prices…who is buying? And why are they buying? I think that the buyers will be both FHB’s and investors. Even if rents drop, unless… Read more »
Greg Atkinson
Guest
Hi Thrifty, Sorry I cannot agree, I stand by my point that Sydney 20-30 years ago was simply another city. How do you massage the data to cover suburbs that did not exist 30 years ago? Sydney is not London or New York, Sydney is still expanding in terms of new housing land. (and is subject to different tax laws, government policies etc) In addition, according to the link you posted the RBA has not got a handle on land prices either and according to the RBA economist “There are no doubt a number of factors that could be contributing… Read more »
rick e
Guest

In Sydney transport roads are reaching capacity, the roads are full.
The trains haven’t expanded or upgraded to satisfaction. So inner-city living prices remain high due to accesses. For now until job losses.

Biker Pete
Guest
Comparing asset classes, realty has performed admirably against the ASX and even cash. Super is barely break-even these days, even if you’re salpacked to the max. By the end of this week, the interest rate will have fallen fifty percent, in less than eight months. Smart FHBs will take the $21K, buy in at around $400K, then lock in a low rate of interest for the longest period possible. Even an 18% fall (if we do follow the UK and US down… and I doubt we will) pales to insignificance when you factor in a 50% reduction in interest… and… Read more »
Pete
Guest
Nice one Biker Pete the real estate bull “when you factor in a 50% reduction in interest… and rising rents!” Lets make some assumptions: – interest rates will stay low – rents will rise – people will stay employed and therefore able to service mortgages and rents – capital appreciation in real estate will continue on its current course…forever – there will be no tax reform While we are at it, let us assume the GFC is over and that real estate in Australia is at a completely affordable level. Now that I have made those assumptions I can totally… Read more »
Ray
Guest
I am over 60 years old. During the past 30 odd years I have invested my hard earned in both shares, share market funds and real estate rental properties. Over those years I have never made any real long term gains from shares, the share market has without fail always bit me on the bum. In 2006 I sold a business to retire and my accountant and my investment manager said start a self managed super fund which I did. They both said invest the money in the stock market but I chose to hold it in cash because of… Read more »
Pete
Guest
Ray perhaps you should join a club with Biker Pete I am not 60 years old, but I do understand that investment trends spanning 30 years do NOT equate to investment trends or cycles that will necessarily continue forever. If I had a time machine, perhaps I could bring you back a sample from the extravagance of 1929. Besides the hundred other counter points already made against the real estate bulls who post here, there are two simple points: 1) just because a trend is positive for 30 years does not mean it will be for the next 30. Ask… Read more »
Pete
Guest
Ray perhaps you should befriend Biker Pete I am not 60 years old, but I do understand that investment trends spanning 30 years do NOT equate to investment trends or cycles that will necessarily continue forever. If I had a time machine, perhaps I could bring you back a sample from the extravagance of 1929. Besides the hundred other counter points already made against the real estate bulls who post here, there are two simple points: 1) just because a trend is positive for 30 years does not mean it will be for the next 30. Ask the Romans how… Read more »
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