When you read articles about Australian housing affordability, it is often comparing the single average adult wage to house prices, from generations ago.
The articles generally say something like, ‘a house was worth three times the annual average wage back in the sixties and is now worth 10 times the average wage. This shows housing has become unaffordable.’
You can’t compare the two because back in the sixties it was one wage bidding on real estate.
Dear Reader, 1) ‘Banks, builders, and REITS.’ That’s how I summed up the way to play the property cycle over the next five years in my recent presentation to investors. Yesterday, we got some evidence that such a strategy is working! How so? Big real estate investment trust Vicinity Centres [ASX:VCX] released its half-year results. […]
Dear Reader, 1) Oh my. Since December, Catherine Cashmore and I have been telling you to put the property cycle at the heart of your investment strategy. A bit of news from developer Mirvac is a case in point. The Australian Financial Review reports that the company will ‘press the button’ on entering the land […]
The bottom line — we have too much housing supply — not too little. The problem is that it’s not available to the market and hidden from view in the upward phases of a real estate cycle.
Digital property advertiser REA Group [ASX:REA] is having an up and down day of trading. Despite opening strongly (up 3.8% at one point), the share price has capitulated. REA shares are now sitting at a 1.37% loss for the day, after traders have abandoned the stock.
Nick Scali [ASX:NCK] shares are up today after releasing its half-year results. Shares were down during early trade but have since recovered and at time of writing they’re trading at $14.58, up 1.3% from yesterday’s close.
Alas, that’s how the world works. There’s always a ‘moral to the story’ and you ignore it at your peril.
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