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And in 20yrs, $2mil
Sure, but it's not likely we see a contribution from mining to economic growth like this again for some time...However, the next mining boom is less than 10 yrs away... India is expected to overtake China as the largest coal importer by 2025. All that investment will really pay off over the next couple of decades.
All you need is this one chart to map the future of house prices:What will Syd be in 10-20yrs?
All you need is this one chart to map the future of house prices:
http://aussiehouseprices.blogspot.com.ar/2011/02/never-ending-capital-growth.html
And wage growth is already around half that rate, not that it will slow prices so you'll need to adjust the multiple of price to income higher.
Of course not, how do you think the average house will reach a 1000x multiple of an average wage without other input?So all houses are bought with wages?
You know full well that your table ignores compositional changes. We have discussed many times before, yet you continue to raise red herrings.Of course not, how do you think the average house will reach a 1000x multiple of an average wage without other input?
The composition of the statistical population of houses in Sydney has changes every time a new suburb (or house) is built. My granny forebearers bought the cheapest crappiest house in 1900 a whole 15km from the CBD for peanuts. Today that house hasn't moved an inch in 110 year. However, Sydney has moved - instead of covering a 15km radius, it now covers a 50km radius. There are 10x(?) as many houses - the composition of Sydney's statistical population of houses has changed. Her house is no longer the cheapest crappiest least desirable house in Sydney, it is in the top 10% of houses. It's managed to grow faster than the average, because cheaper houses have been added to Sydney.
That's what I meant when I said above that there's a difference between a specific house that an SSer buys and a citywide average that has cheaper houses added all the time.
The theorists who look at only averages or medians may be right - median house prices may not double in 10 years. However, NOBODY buys the medians, because many of the houses that will make up the median in 10 yrs time haven't been built yet. Therefore the headline median is irrelevant to property investors. Property investors buy specific houses, that slowly get further from the periphery, and relatively more desirable.
So all houses are bought with wages?
I think you're missing the point at the other end of the compositional change.Right on keithj, which is why when average house prices are 1000x multiple of average incomes Sydney will probably have a 300km radius.
If you're saying that the concrete examples I provided of compositional change doesn't take place, then you certainly won't change my mind.keithj, your whole "compositional change" red herring falls apart if you were to simply look at an area that's seen little change over the last 15-20 years and compare price to income ratios (local income to local prices) over time in that specific locale. I'd go to the trouble of documenting some Australian examples, but I know it won't change your mind.
Of course compositional change happens. I'm just saying it's not the main driver of prices rising faster than incomes.
You don't need to tell me. The chart (and two subsequent posts) was intended to parody what some on here believe with conviction, maybe you should tell them!Excellent, then we are in complete agreement that median prices don't double every 10 years. And that your table is based on flawed assumptions.
How long before the median price in Melbourne is $1 mill?
10 years...
I'm just saying it's not the main driver of prices rising faster than incomes.
I just sent some cash to help my godson buy an apartment in Singapore His real earnings are somewhere around 30 thousand a year.
The apartment he's buying? Costs over a million.
Sorry, I didn't get the parody, it came across to me as a genuine belief in the assumptions underlying that flawed table.You don't need to tell me. The chart (and two subsequent posts) was intended to parody what some on here believe with conviction, maybe you should tell them!
You don't need to tell me. The chart (and two subsequent posts) was intended to parody what some on here believe with conviction, maybe you should tell them!