dtcwee: The Value of Nothing

As if you needed another measure to tell you Australian house prices are out of whack. The Price-to-Earnings (P/E) ratio tells you how much people are willing to pay for an asset compared to how much it earns. Currently, the P/E for the world's 100 largest companies is 26.68 . A suburban Adelaide home worth $1.2M bringing in $750 a week rent and costing $12,000 per year (council rates, insurance, maintenance) has a P/E of 44 . [1.2M / ((750*52)-12,000)] via GIPHY