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I wonder if the west will see a similar effect from the outta control property prices. Historically when people retire they have their house paid off and they c
by Gustomaximus 10y ago
I wonder if the west will see a similar effect from the outta control property prices. Historically when people retire they have their house paid off and they can live on a low budget for the retirement years. This is likely not going to be the case for a large number of people in ~35 off years.
- averagewall 10y agoThey can move to small towns with cheap property. High prices are mostly a city phenomenon which is not as important when you don't work anymore.
- Animats 10y agoThey can move to small towns with cheap property. Of which Japan has many, filled mostly with retirees. Also, since public services are funded nationally, the civic infrastructure (roads, schools, hospitals) is kept up even when the population drops.
- Aeolun 10y agoTo a point.
- Mediterraneo10 10y agoThe New York Times has presented a couple of articles over the last two years on dying towns in Japan, and it was noted that once the population drops to a certain point, the utilities get cut off, making it hard for anyone who actually wants to live there, to do so.
- mooreds 10y agoAs far as affecting retirement, I am less worried about rising property prices and more concerned about how easy it is to access home equity. That ease makes it very tempting to dip into your nest egg when you should be paying down your mortgage. And there's always some reason to borrow. Of course, that is only an issue for folks who've been able to buy property, but as another comment mentions, if you leave certain metro areas property becomes very affordable very quick.
- bdowling 10y agoThe reason to borrow is to take equity out of your home (a money pit with limited tax benefits) and put it into some other investment that is either generating income or accumulation of capital.
- mooreds 10y agoYes, that is a good reason to borrow. A bad reason to borrow is because you really want a vacation! But a heloc doesn't care what you borrow.
- PebblesHD 10y agoThe issue here then becomes what do you do at 60 when you've been unable to purchase property and can now not qualify for a standard 30 year mortgage? If you've paid 35% of your before tax income in rent since you were 20 on a standard salary, you've got maybe $150k(AUD) in savings if you were really, really dedicated, which isn't even enough to buy a house 600km out of a major city (Sydney in my example) and now have no income outside of superannuation or a government pension? Quality of retirement (in Australia) evaporates if you have to pay market rate rents...
- pm90 10y agoI might be wrong since I don't know what the economy in Australia is like, but it is VERY unlikely for someone in the US to have $150k in savings and yet not own a home. In fact the opposite does happen a lot: all of a person's equity is in their house, and they have $0 in savings. But then they sell their house, move to a cheaper house and used the difference to make ends meet.
- ericd 10y agoHm, that sounds an awful lot like a Ponzi scheme, if people are actually expecting that. Do you think a large percentage of people are planning on that?
- devoply 10y agoI dunno if there have been studies which account for where all that wealth is going from the increased housing prices. My guess would be the banks and the 1%.
- flukus 10y agoA lot of debt + low inflation == bankers wet dreams.
- Markoff 10y agoso what should one do if let's say in his 30s he already has his own house without mortgage and any help of parents?