Certified Financial Planner professional, Matt Hern has three times been awarded as one of Australia's Top 50 Financial Planners by The Australian Financial Review Smart Investor. He is passionate about guiding you on the right financial choices to achieve what you really want. Matt Hern is an Authorised Representative of Charter Financial Planning Limited AFSL 234665. All information is general advice only.

5 responses to “Is residential property over, under or fair value?”

  1. Gihan Perera

    Good, solid article, Matt. I agree that the current flat or negative trend might simply be a correction following the anomalous fast growth of the past decade. I also agree that we shouldn’t expect to see the recent “stellar capital growth” again soon – and certainly shouldn’t be relying on it.

    It’s interesting that your list of requirements is all about the financial side of things. I’m no economist either, but I think an economist would take a more supply/demand approach, and also add factors like: Growing population, population moving to cities, mining and resources boom, China’s demand for Australian exports. All of these things could increase demand on housing, and (in my humble opinion) will DRIVE some of the factors you’ve mentioned.

  2. Steven Mandalidis

    I think there is another reason for the growth over the last 20 years, most families now have two income earners so banks can lend against two incomes and the combined household income can finance larger mortgages. The demand will continue to outstrip supply so I think banks may to look to extend loan terms over 30 years (generational mortgages).

  3. Paul Hodson

    Good article Matt. I agree with your suggestion that prices will ‘revert to the mean’ at some stage. Either prices will fail to rise, or wages will increase or both. Any argument that prices could become more stretched than they already are is highly suspect. Let’s not forget what’s happend in Ireland, Spain, Great Britain, USA and elsewhere. They also thought prices could only go up.

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