The average rate of increase in house prices in Sydney has been around 6% pa over the past twenty or thirty years, and it looks like this rate may apply over the coming 5-10 years. Prices remained flat between 2002 and 2006 (after the last property boom collapsed in Sydney), but it now looks as if prices have started to increase again. If the lengthy stock market boom comes to end we are likely to see more investment flow back into the property market, while will help support Sydney property price increases over the next 2-3 years.


The graph of our property portfolio shows how the overall valuation has tracked close to the expected long term rate of 6% pa, reverting to the trend line after the "housing bubble" burst in 2004. Unfortunately after initially paying off extra from our home loans each month (with plans to clear the mortgages by 2020) we have had to start redrawing some of our advance payments each month while DW was on maternity leave, and will continue to do so while DW is only working part time two days a week. Anyhow, after the recent changes to "Simpler Super" it is more tax efficient to salary sacrifice into superannuation and eventually use part of our accumulated retirement funds to pay off any remaining morgage balance, than it is to pay off our mortgages using after-tax dollars.
Copyright Enough Wealth 2007
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