I don't care. All I said was property is likely to rise above the rate of wage inflation.
As usual you are shifting the argument as you do when on shaky ground.
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Any rapid rise in property prices from the current unaffordable prices could lead to next crisis. Consumer purchasing power will go down further. This time is not different.
https://land.tech/blog/housing-booms...sts-since-1975
Something for everyone. Longest available data series I could find - 1962 to 2023 (61 years)
House prices rose at a 8.2% CAGR (2.56% real)
CPI rose at 5.5%
Wages rose at 6.6%% (1.04% real)
All from 30 June 1962 to 30 September 2023, per the RBNZ inflation calculator.
Nominal GDP (because house prices are nominal, otherwise you'd need to convert them to real to compare to real GDP)
Rose 8.4% from March 1962 (annual basis) to September 2023 (annual basis). That equates to ~2.74% real)
Source - Stats NZ infoshare for 1962 data, RBNZ for recent data.
Great work Muse, can you adjust to find out the effect of unprecedented multiple to income expansion over the last 20 years?
My guess would be sub 1% real. Yes that expansion has happened but we need to look forward. Also real GDP is lower now.
So 0 to 0.25 real over next 60 years without compression and negative 60 year real return with compression to normal multiple to incomes is possible.
It doesn't include the utility of a house.
It probably also doesn't include changes to taxes, like the introduction of GST etc.
According to Muse's post, since 1962 house inflation has run at over 2.5 times that the rate of wage inflation. And as mentioned this doesn't include the utility of living in or renting out a house which makes that multiple over wages much higher.
The other thing you might have to factor in is the size and quality of the house you are comparing across the decades. The average house built in 1962 would have been 2-3 bedroom weather board with a tin roof and no insulation on a footprint of 100 square metres. These days you would be looking at a 3-4 bedroom house, built fully insulated and from more permanent materials. Add in a walk in garage as well and the house footprint would have near doubled. So comparing an average house in 1962 with an average house in 2023 is not really an 'apples with apples' comparison.
SNOOPY
Fair point Snoop, but you could say the same of the labour force where it's now far more of a tertiary educated services market than it was in 1962, many of the manual jobs of 1962 have now been mechanised.
Side note: They were probably built better in 1962. I would like to see what many houses even built now or the late 90s early 2000s will look like in a few decades.