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Re:Fascinating buried fact about the "recession"... - 2008/07/28 16:49
Yes you are right-in the long run of course property is a good investment-after 20 years or so. You are lucky if you live in Melbourne. I'm currently in Sydney where I spend 6 months of the year,and bought my little flat 20 years ago. Plus I managed to buy a bedsitter in central London 30 years ago when that was still possible which I let out to tourists for 3 months at a time.
Prices in Sydney are quite rediculous compared to Melbourne and other cities-they're as high as London and New York. Overpriced.
The illusion part comes in-if you want to sell your home to move somewhere else-you just need more money-unless of course you were selling up while prices are high and retiring to Spain or Thailand where you could live comfortably on just what you got for your house if it was fully paid off.
But you must be aware of the Howard governments artificially increasing home ownership by a variety of grants that encouraged people who really couldn't afford it to take out morgagaes-and now we will suffer-and it's going to get a whole lot worse-because of the USA sub prime mortgage problems.
Hope you weren't a Howard voter but I think he and Costello were utterley irresponsible and maintained a bogus position that Australia was building great wealth and they were responsible for it-when it was always what was dug out of the ground in West Australia and sold to developing nations like China-our saviour.
Australia and plenty of "economists" are rediculous because they have promoted the idea that every Australian should own their own home-plus an investment property ( which doesn't make sense). Every European country has had a high percentage of government housing-some up to 35/40% which was the same in the UK at 35% but now down to around 20% after Thatcher began to sell off properties. The rest of Europe also has a high proportion of rental homes with government price controls. It's worked well for a hundred years.
Even the USA has always had a high proportion of government housing.
But the fact is that the USA-followed by the UK followed by Australia all have the highest proportion per head of personal debt which is staggering-people living beyond their means. There will be many tears before bedtime.
But as I predicted at least 20 years ago to friends-the coast of England was were to buy property and some have. And that's were prices are increasing dramatically.
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