Nice analysis Russell. What do you make of the housing shortage and record low vacancy rates.? In Perth where I am invested, and runs on a different cycle to East Coast property, yields are rising supporting prices Wages are also rising due to labour shortages, thus supporting the higher yields.
I also think Australian house prices arein substantial part dependent also on Chinese purchases, as is also the case in Canada, at least on the west coast (Vancouver).
The US real estate net worth chart picked my interest as The move up in property prices in the late 60‘s - 80’s has me thinking how demographics played a huge role as the baby boomers, were coming into the labor force(women and minorities have a larger role as well). Household formation started to boom and people need to fill these homes/apartments with stuff just as revolving credit was becoming widely available.
Would love to hear your thoughts on that and if a pro labor cycle has strength to run even as global demographics deteriorate. Thx!
Perhaps it is the opportunity for rising rents as nominal wages rise that can support property markets? That seemed to be the driver in the UK in 70s and 80s.
I am have been buying older houses on large blocks and putting a "spec house at the back", then doing a strata. Due to lack of capital, I have always sold the houses at the end of the project and made the capital gain, which I am happy with.
As I approach 60 my plan had been to keep a couple of the new properties and let them out (depreciation etc), while selling the older ones.
I may continue with the development and sell strategy.
"Population of Mollymook and nearby Ulladulla is maybe 50,000 people."
Mollymook and Ulladulla? lol 🤣
Nice analysis Russell. What do you make of the housing shortage and record low vacancy rates.? In Perth where I am invested, and runs on a different cycle to East Coast property, yields are rising supporting prices Wages are also rising due to labour shortages, thus supporting the higher yields.
I also think Australian house prices arein substantial part dependent also on Chinese purchases, as is also the case in Canada, at least on the west coast (Vancouver).
That is not a question of o "if" as prices are already falling around the globe.
"But in an age of rising incomes (ie pro labour policies) property prices are unlikely to fall. "
Great write up, Russell. Thanks!
The US real estate net worth chart picked my interest as The move up in property prices in the late 60‘s - 80’s has me thinking how demographics played a huge role as the baby boomers, were coming into the labor force(women and minorities have a larger role as well). Household formation started to boom and people need to fill these homes/apartments with stuff just as revolving credit was becoming widely available.
Would love to hear your thoughts on that and if a pro labor cycle has strength to run even as global demographics deteriorate. Thx!
-Nick
Perhaps it is the opportunity for rising rents as nominal wages rise that can support property markets? That seemed to be the driver in the UK in 70s and 80s.
Very interesting, thank you.
I am have been buying older houses on large blocks and putting a "spec house at the back", then doing a strata. Due to lack of capital, I have always sold the houses at the end of the project and made the capital gain, which I am happy with.
As I approach 60 my plan had been to keep a couple of the new properties and let them out (depreciation etc), while selling the older ones.
I may continue with the development and sell strategy.
Russell it would be interesting to see if your findings would be different if you started with the granular first and THEN the macro?