Read on Twitter
Here’s why:
Ownership
50 yr housing tenure data shows owners without a mortgage down (29% from 42%) whilst private LL renters up (27% from 18% & those with mortgages up (37% from 18%).
The rate of ownership of 30-34yo down from 64% to 50% & 25-30yo down from 50% to 37% https://twitter.com/drcameronmurray/status/1347351558615310336
Ownership
50 yr housing tenure data shows owners without a mortgage down (29% from 42%) whilst private LL renters up (27% from 18% & those with mortgages up (37% from 18%).
The rate of ownership of 30-34yo down from 64% to 50% & 25-30yo down from 50% to 37% https://twitter.com/drcameronmurray/status/1347351558615310336
During the same timeframe, ABS occupancy figures have shown an increase in the median age FHB to 36 yrs from 33 yrs.
And subjective anacdotal data (surveys) shows the average income can no longer afford the average home (especially in metropolitan areas).
And subjective anacdotal data (surveys) shows the average income can no longer afford the average home (especially in metropolitan areas).
Saving a deposit:
The average TD rate has decreased from 13.95% in 1990 to 0.5% making it harder to save a deposit.
According to ANZ, the duration of a median household income to save a 20% deposit & saving rate 15% has been increasing exponentially and now stands at 8.9 years.
The average TD rate has decreased from 13.95% in 1990 to 0.5% making it harder to save a deposit.
According to ANZ, the duration of a median household income to save a 20% deposit & saving rate 15% has been increasing exponentially and now stands at 8.9 years.
Debt:
Research by AHURI shows the burden of Aussies retiring with a mortgage has risen 600% from 1987.
WPI has trended from 4-5% first decade of the millennium to now 2% making it increasingly difficult to grow out of debt!
Research by AHURI shows the burden of Aussies retiring with a mortgage has risen 600% from 1987.
WPI has trended from 4-5% first decade of the millennium to now 2% making it increasingly difficult to grow out of debt!
We’re leaders in debt metrics (HHD/GDP, HHD/disp income & DSR) predominantly consumed in mortgages. Which according to the RBAs own research, correlates to lower discretionary spending even when they control cashflow by lowering IRs. Quite problematic in a services-based economy.
Risk:
Empirical research shows:
1. Countries with higher HHD are more susceptible to financial crises
2. Banking sectors with higher weighting to RMLs are more susceptible to banking crises.
3. The catalyst is often higher IRs, which comes by UNEXPECTED inflationary displacements
Empirical research shows:
1. Countries with higher HHD are more susceptible to financial crises
2. Banking sectors with higher weighting to RMLs are more susceptible to banking crises.
3. The catalyst is often higher IRs, which comes by UNEXPECTED inflationary displacements
IRs:
We all know the change in IR is the leading driver of prices as it both increases purchasing power & brings forward demand by stimulating drivers of behavioural psychology & cognitive bias, which is often perpetuated by media outlets with or without vested interest.
We all know the change in IR is the leading driver of prices as it both increases purchasing power & brings forward demand by stimulating drivers of behavioural psychology & cognitive bias, which is often perpetuated by media outlets with or without vested interest.
With rates @ ZIRP, we’re likely experiencing the last surge in house prices.
But as credit inevitably decelerates, what will happen when a large amount of our economic activity is driven by services fuelled by leveraged speculation (crowding of employment)?
But as credit inevitably decelerates, what will happen when a large amount of our economic activity is driven by services fuelled by leveraged speculation (crowding of employment)?
The answer is that we’ll have the same services available but with half the demand.
You see, it isn’t enough for house prices to just stagnate. For the party to continue we need prices to rise indefinitely because our housing market is the economy!
You see, it isn’t enough for house prices to just stagnate. For the party to continue we need prices to rise indefinitely because our housing market is the economy!
And thus, it’s not just the housing market that is broken, it’s our whole economy that is leveraged to it!
