Working in the development industry in Australia it’s interesting to see that the full range of housing options are still being offered in new subdivisions, from medium density, through to rural residential, people have slowed there buying, but, well… people are buying. But reading quotes like this one from Planetizen makes me think that even in regional cities such as Newcastle, prices have probably reached their immediate peak for the moment. The house we are living in, renting while we ponder our move across the pacific, has been up for sale for months. Tomorrow morning will be the first open house inspection in what seems like months too.
Housing prices have gone up much more than incomes have, said Christopher Jones, vice president for research at the Regional Plan Association in New York City. Clearly, you can’t sustain that sort of imbalance over the long run. There’s only so long that housing prices can go up without sustained increases in income to support them.
I’m no economist, but I can’t see incomes rising to meet housing price increases, nor will they rise to compensate for interest rate hikes. In Australia employers are fairly resistant to all but the major market indicators, particularly since the government introduced workplace reforms. Good luck getting a pay rise without sacrificing some holidays or sick leave! It just gets harder and harder to break into the property market as a first time buyer.