A question about housing boom in AUSTRALIA?

Question

In last 10 years average price of a house in all the majore cities in Australia has increased to 200%. Say for example a house which cost $100,000 is now about $300,000. Further, rent also gone up. Seamingly, there is no end to this trend.

While few makes money out of it, millions suffer to pay martgage. This is not a good thing for the future generation.

Is there a way to stop this trend?

Answer 1

It isn't all areas that have gone up the same, but all we hear in the Newspapers are the extremes.

An example is the Sydney western suburbs; in 1990 I bought a standard 3 bed house for $105,000 in a good area there.  Today, a few very similar ones are selling for about $330,000.

That works out at an average of only 6.95% per year over 18 years.  

However, the "average" prices for the area have increased by a higher % figure over that period, but mainly due to larger and more expensive houses being wanted these days.

More recently, the overall Sydney market has only gone up 5% in the 12 months to March 2008, Perth by 1.5% and Hobart by 4.3%

Different areas rise at different times, and currently Brisbane, Melbourne and Adelaide are playing catch up.

Part of the answer is to build smaller houses again, 3 beds, 1 bath, single garage, no dishwasher, no media room, etc..