Houses are now worth 2-3 times your income like in the eighties.
What are you now going to do with your free time now your house is paid off quicker?
Good!
So, given that my mortgage balance doesn't change with changes in house prices, does that mean I'm getting a pay rise? Woohoo! I'm off to load up on my credit card! Happy days 
Eh?
Housing market crash wouldn't help anyone who already owns a house (ie an adult 
), you understand that right? We'd be stuck paying a big debt for nothing.
Whoops haha.
Good point. Will not correct my original post as a reminder of stupidness. 
I was thinking along the lines of those buying rather than existing (very selfish of me).
So suppose you owned your house outright, what would you do with your time and job?
Be interested to see what kind of life people would live not paying off a mortgage for the rest of their life. Would you just buy more houses, or is enough enough?
Obviously hypothetical.
I'm trying to figure out whether you mean you have a huge income, or house prices are cheap where you are.
Me, I doubt house prices would fall at all. At most I suspect they just wouldn't rise any more for a while. Interest rates are low, rents are still the same as they were yesterday, so I am not sure what you think has happened to cause a drop in value.
If the average house price in say Melbourne is $515k does that mean you earn $250-300k per year?
If so I want a job like yours!
I don't see how the market can crash while rents are so high. If property prices dropped a bit then people who are renting would be better off buying, thus increasing demand.
The main difference between the 80s and today is Australia's population has almost doubled while the number of new houses has nowhere near doubled. Plus most of the new houses are in places fewer people want to live, ie not close to work, recreation or decent public transportation.
before the crash, i was 70 k off owning my own house, at 32. I borrowed money and geared heavily into shares. now I owe lots more.
Geez, could be looking into a mirror.
Geez, could be looking into a mirror.
Topping 23mil population, cant build houses fast enough, no crash gonna happen here for a while. Demand way outstrips supply in the main cities. If a crash was going to happen it would have occurred during the GFC, it didnt really, dont worry about it.
Hong Kong is not a good example at all, lots of unskilled, poor migrant workers there, this is not the case in Aus we mainly have selected skilled migration to fill gaps in our workforce.
When my mortgage is paid off, only $450k to go, so will be a while, but when, i just wont work as much. But that would be pointless unless i have other passive income to pay the bills, wont always be able to work, so yeah i will probably have to do something else as well.
Since average home price is $500k but real cost or worth is only $150k, the rest is useless, wasted mark up, banquers gain.
Imagine that that $350 k wasted now you did invest in such passive and safe investment as solar panel on your roof.
at $1 per watt that give you 35 kw electric power on your roof !!
Income, at 40 cents per watts most of us will be paying for electricity is:
5kw per day x 35 kw x $0.4 x 365 days per year = $25,550 per year
not bad profit for doing nothing at all 
I have paid my house off you think you're on easy street for a while windsurfing snowboarding holidays when you want then reality hits the bills don't stop the kids don't stop eating still sailing when windy working hard in between
With more expandable income, people (we) 'd all faced with two choices: spend it now on holidays and more consumables like re-renovating, changing iPhone and SUVs faster. Or pay off other debts like credit cards, and save a bit for the older days.
Mhh, I wonder which one it would be...
i am not complaining about very expensive RE, but
how come they build solid double brick houses in wa when in victoria they build $hity boxes made of ticky tacky and the prices pretty much the same !
that is the weirdest thing about the australian housing that i can't comprehend.
Because wa has a double brick mindset instilled in it by decades of money hungry brick suppliers. This will change over the next decade with energy ratings increasing rapidly and a shift toward greener building driven by legislation.
Mortgages with a very low initial interest rate for a few years were very popular during the bubble. They allowed buyers to qualify for a larger loan than they would qualify with a conventional fixed rate 30 year mortgage.
The thinking was that after the initial low rate period passed one could simply refinance. Values were rising so rapidly it made sense to buy as much house as one could get because it would be worth so much more in a few years.
What nobody figured was in a declining market no bank would offer to refinance a loan on a home where the value had become less than the loan amount.
So people were stuck with mortgages that had reset to higher rates and lot's of those loans were for interest only during the initial period and now they were paying principal and interest at a higher rate as well so the monthly mortgage doubled or tripled in cost while the value went below the amount financed so it became an easy decision for a lot of people to just stop paying and eventually get foreclosed upon.
^^^ just to clarify for our australian listeners, what happened in the US will never happen here. Our property markets are entirely different. Our property laws are entirely different. Our mortgages are set up differently. Our economies are different. Our people and their attitudes to housing are different. Every single factor that influences a property market is.. wait for it... entirely different.
So while it's interesting to hear Beagle describe what happened there, keep in mind that it's entirely irrelevant to our situation.
Agree with comments on Aus RE.
RE represents such a big part of bank assets that they would never allow RE to fall. Would almost destroy our financial system if it did happen.
Forecasts are for decreased Chinese demand (Garnaut), though even if this did happen, I can't see RE ever decreasing.
Only exception could be Chinese investment in Aus RE. If for some reason they needed to liquidate their assets it could create a dramatic fall short term..... their re investment exposure here is huge. And not just residential, farms are being snapped up very quickly.
Have to agree with old mate on this one:
“Where is this headed? This is not just about the current generation, it's about our kids and our kid's kids. We should be selling the milk, not the cow, the food, not the farm,” Senator Xenephon said.
But here we have a very interesting attitude. If we can sell it, we will. I find it amazing, aussie attitudes, intreging really, because I don't understand it. I guess people get more outraged about the outcome of the show "The Voice" over selling out the future generations.......
Never thought I'd say this but - what about the children?
