While by some measures housing has become less affordable to a smaller extent, this graph finishes just before the effects of the GFC and the end of a period of very strong house price rises. Since 2008 affordability has dropped back somewhat.
facing reality
- Thread starter coastymike
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Bear in mind that housing is less affordable than it was twenty years ago. Chart from the RBA in 2008.
A lot of investors have benefited from rapidly rising property prices. The downside is largely borne by new entrants to the market.
so in a nuthsell, doesnt the graph prove/show that over the last 10 years or so income to house price ratios are pretty much at an all time high and the gen Y whingers do have a valid point???
or is the point only minor, but it is perceived to be worse because 99% of them cant afford a 3bdr in Bondi with a theatre room by the time they are 30 whilst still being able to afford $1000 ipads, $1000 iphones, eat out 4 times per week, plus their twice annual international holiday?
Another thing to consider over the last thirty to forty years is that the cost of consumables has decreased significantly.
In the early 1980s it cost almost $3000 AUD to buy a return flight to the UK. It still costs $3000 and often less. Overseas travel has become much cheaper and more young ones take it as 'normal" to travel. In my day it was travel OR buy a house, not both.
We paid $24ooo for a new corolla (mid-range inclusions) in 1996 and they are still that ticket price. A new Commodore cost about $36,ooo in 2000 and still costs that amount (last time I looked), hence it has decreased significantly in real terms. In 2000 we paid $28ooo for a Vectra, you can get new diesel European cars for that now.
Ten years ago "everyone" (not us) had to have a $5000 or more big screen TV. Now they are one fifth of that. Furniture and white goods are much cheaper than they were 'back then". Computers used to be more than $2000 each new when I got my first (very second-hand), now they are $600. Interest rates are usually lower.
So just because house prices really are several more times the average wage now, other costs of living have come down in that time and it might all just balance out.
In the early 1980s it cost almost $3000 AUD to buy a return flight to the UK. It still costs $3000 and often less. Overseas travel has become much cheaper and more young ones take it as 'normal" to travel. In my day it was travel OR buy a house, not both.
We paid $24ooo for a new corolla (mid-range inclusions) in 1996 and they are still that ticket price. A new Commodore cost about $36,ooo in 2000 and still costs that amount (last time I looked), hence it has decreased significantly in real terms. In 2000 we paid $28ooo for a Vectra, you can get new diesel European cars for that now.
Ten years ago "everyone" (not us) had to have a $5000 or more big screen TV. Now they are one fifth of that. Furniture and white goods are much cheaper than they were 'back then". Computers used to be more than $2000 each new when I got my first (very second-hand), now they are $600. Interest rates are usually lower.
So just because house prices really are several more times the average wage now, other costs of living have come down in that time and it might all just balance out.
Yea, it IS more expensive to buy these days. Simple. At least mortgage rates are low, now is the time.
It used to be (I think, don't quote me) around 3-5 times ONE persons annual income, now it's pretty well doubled. Being 3-5 time a COUPLE'S annual income. I'm not whinging though, we've got a few of the buggers and we know they'll only be more expensive next year too.
It used to be (I think, don't quote me) around 3-5 times ONE persons annual income, now it's pretty well doubled. Being 3-5 time a COUPLE'S annual income. I'm not whinging though, we've got a few of the buggers and we know they'll only be more expensive next year too.
agree,
things that I have seen increase in the last 10-20 years
utilities,
cost of living
petrol
going out to eat/drink
public transport
anything to do with government/councils
things that I have seen decrease in the last 10-20 years
Tvs/PCs and other consumer electronics
Airfares
Basically anything thats sold in target/kmart, $10 for a blender, $2 for a kids toy etc
cars seem to be cheaper in the lower end
and yes the expecations of people these days is different,
20 years ago, we were paying for dial up and home phone,
now adays people pay for home phone, internet, 3-4 mobiles per house hold, tablet, a mobile phone these days isnt considered a luxury so our cost of living has certainly increase, many households now have more then 1 tv
I think the previous post is pretty invalid! Just because the cost of some consumer items has dropped due to advances in technology, the cost of living over all has generally increased. However the standard of this living is a lot higher.
The first mobile phones in the 80s were thousands of dollars, now you can get one from the servo for 80-bucks!
As a “Gen – Y” I think the biggest difference is as time goes on, especially in the relatively young country of Australia Wealth builds! We are not used to seeing inherited wealth like that of America and the UK. But it is going that way, as time goes on and wealth compounds desirable places to live like bondi and peppermint grove will just become more and more expensive making that dream feel so much further away and unattainable for some! The society’s economic gaps will widen and more people will complain that Oz is no longer the lucky country!
I don’t buy into it! Opportunities still exist everywhere, probably more so now than they every have in our history. You just have to know were to look!
The first mobile phones in the 80s were thousands of dollars, now you can get one from the servo for 80-bucks!
As a “Gen – Y” I think the biggest difference is as time goes on, especially in the relatively young country of Australia Wealth builds! We are not used to seeing inherited wealth like that of America and the UK. But it is going that way, as time goes on and wealth compounds desirable places to live like bondi and peppermint grove will just become more and more expensive making that dream feel so much further away and unattainable for some! The society’s economic gaps will widen and more people will complain that Oz is no longer the lucky country!
I don’t buy into it! Opportunities still exist everywhere, probably more so now than they every have in our history. You just have to know were to look!
I have no figures or references but would it be fair to assume that 30-40 years ago most families were single income families whereas now most are double income? So even if affordability has halved (I have no idea if it has) if you're a working couple things haven't changed much?
Sure it sucks if you're single, or a single income family, or both earn below average wage, etc., but it's not like affordability has changed for the bulk of buyers. And I'm sure that 30-40 years ago there were also folks who earned less than average wage, or were unemployed, or single mums, etc. for whom it was just as hard to get onto the property ladder.
Anyhow, I always come back to the same point: Sydney is one of the most beautiful cities in the world and all sorts of wealthy foreigners and returning expat Aussies will happily part with oodles of cash to get their little slice. You're not competing with other average-salaried workers for that nice terrace in Paddington (you're not even in the competition). Sure it sucks for the rest of us average folks, but it is what it is and it's not likely to change. And that's the price you pay if you want to live in paradise.
Sure it sucks if you're single, or a single income family, or both earn below average wage, etc., but it's not like affordability has changed for the bulk of buyers. And I'm sure that 30-40 years ago there were also folks who earned less than average wage, or were unemployed, or single mums, etc. for whom it was just as hard to get onto the property ladder.
Anyhow, I always come back to the same point: Sydney is one of the most beautiful cities in the world and all sorts of wealthy foreigners and returning expat Aussies will happily part with oodles of cash to get their little slice. You're not competing with other average-salaried workers for that nice terrace in Paddington (you're not even in the competition). Sure it sucks for the rest of us average folks, but it is what it is and it's not likely to change. And that's the price you pay if you want to live in paradise.
hmmmm - actually I did sleep on the floor in my first house (rental) and the only piece of furniture I owned was a small card table made by my grandfather - everything else was borrowed from other people's basements.
First ppor had no carpet, no curtains, on the side of a cliff with no landscaping other than a narrow and very steep driveway. Still on borrowed furniture but "owned" a bed by that stage.
And I'm only a Gen X ...
Fifteen years ago ended up separated and actually owned a lounge suite and a fridge - but my bed was now the old one left behind in the new (renovators delight) ppor I bought.
And who pays $80 for a mobile? I bought junior a 3G prepaid touch screen thingie for $45 only last month from BigW.
Had to have a wee chuckle yesterday when the paper ran a photo of Donald Street, Hamilton (NSW) from the 1970's ... bare land with a dirt road running thru it - and even a horse and cart ... nowadays it's prime edge of inner ring.
Anyhow - there will always be whingers ...
First ppor had no carpet, no curtains, on the side of a cliff with no landscaping other than a narrow and very steep driveway. Still on borrowed furniture but "owned" a bed by that stage.
And I'm only a Gen X ...
Fifteen years ago ended up separated and actually owned a lounge suite and a fridge - but my bed was now the old one left behind in the new (renovators delight) ppor I bought.
And who pays $80 for a mobile?
I bought junior a 3G prepaid touch screen thingie for $45 only last month from BigW.Had to have a wee chuckle yesterday when the paper ran a photo of Donald Street, Hamilton (NSW) from the 1970's ... bare land with a dirt road running thru it - and even a horse and cart ... nowadays it's prime edge of inner ring.
Anyhow - there will always be whingers ...
You won't be surprised to find that a person's attitude is fundamental to their outlook.
People (not all, but definitely the majority) I talk with from lower socioeconomic areas play the victim card. They hardly ever take responsibility for anything.
People (not all, but definitely the majority) I talk with from higher socioeconomic areas take full responsibility for their outcome, regardless of external influences. They almost always take responsibility for everything.
It all boils down to attitude. One attitude allows you to grow and expand, the other smothers you and confines you for life. You simply need to choose which one to adopt.
People (not all, but definitely the majority) I talk with from lower socioeconomic areas play the victim card. They hardly ever take responsibility for anything.
- If something good happens in their life, they blame it on luck.
- If something bad happens in their life, they blame it on anyone but themselves - Govt, neighbours, rellies, upbringing etc etc.
People (not all, but definitely the majority) I talk with from higher socioeconomic areas take full responsibility for their outcome, regardless of external influences. They almost always take responsibility for everything.
- If something good happens in their life, they pat themselves on their back and say "I did that".
- If something bad happens in their life, they normally take full responsibility for the failure and commit to doing better next time.
It all boils down to attitude. One attitude allows you to grow and expand, the other smothers you and confines you for life. You simply need to choose which one to adopt.
Amen! .....
Population density is a more important factor than the overall population number. Some scary numbers below:
Hong Kong 6480/km2
London 5286/km2 (City of London) or 1510/km2 (London metropolitan region)
Sydney metropolitan area ~362/km2
Doubt it'd ever get to the same level
I also just had a look at London prices and outside of the highly prestigious areas, it's pretty much the same price as most Australian capital cities. Certainly better value for money considering where you'd be living. In my very quick 2 minute search, I found one three-bedroom apartment for 410k (AUD) that was 10kms from the CBD and within walking distance to several tube stations. Good luck with getting similar, even one that needed renovation, in any capital city in Australia.
Housing is less affordable in the Sydney statistical area than it was 30 years ago. It's a simple statistical fact. It takes a much higher percentage of the average income to buy the average house. I don't see how this can be argued with.
It's not whingeing. It's like saying the population of Australia is 22 million. There is no value judgement attached to it.
It is harder to gain an entry into the Sydney market than it was 30 years ago for that reason. Instead of it being one wage, there needs to be two wages. And they both need to be pretty high as well.
I left Sydney because of a number of factors. I did not want to pay an exorbitant amount of money to get something that meant I was traveling for hours each day, but that was only one factor. The traffic and the poser-ness of society also got to me after a while. But for many people the jobs are located there. And it is hard to get a foothold into the market.
I'm in my late twenties. Many of my friends are trying to get their first properties in Sydney. 2 bedroom apartments are advertised at the 480k mark. They get sold to investors for 520-550k mark time and time again. If they were actually advertised at the prices they were selling for there would be a lot less angst in the marketplace IMO.
It's all very well and good to pontificate about how they should respect their elders authoritah in a Cartman-esque voice, but it doesn't really acheive anything, except for allowing oneself to give themselves another pat on the back. Taking a nonsense approach about socio-economic status is complete drivel as well. Most people I know from poorer areas work bloody hard as they don't get things handed to them on a plate from mummy and daddy. They appreciate the sacrifices made to improve their life, rather than just expect things to happen for them.
Pushing an ideological position that rich people are better people is frankly shortsighted and just shows a complete dissociation from the majority of people out there in the world.
It's not whingeing. It's like saying the population of Australia is 22 million. There is no value judgement attached to it.
It is harder to gain an entry into the Sydney market than it was 30 years ago for that reason. Instead of it being one wage, there needs to be two wages. And they both need to be pretty high as well.
I left Sydney because of a number of factors. I did not want to pay an exorbitant amount of money to get something that meant I was traveling for hours each day, but that was only one factor. The traffic and the poser-ness of society also got to me after a while. But for many people the jobs are located there. And it is hard to get a foothold into the market.
I'm in my late twenties. Many of my friends are trying to get their first properties in Sydney. 2 bedroom apartments are advertised at the 480k mark. They get sold to investors for 520-550k mark time and time again. If they were actually advertised at the prices they were selling for there would be a lot less angst in the marketplace IMO.
It's all very well and good to pontificate about how they should respect their elders authoritah in a Cartman-esque voice, but it doesn't really acheive anything, except for allowing oneself to give themselves another pat on the back. Taking a nonsense approach about socio-economic status is complete drivel as well. Most people I know from poorer areas work bloody hard as they don't get things handed to them on a plate from mummy and daddy. They appreciate the sacrifices made to improve their life, rather than just expect things to happen for them.
Pushing an ideological position that rich people are better people is frankly shortsighted and just shows a complete dissociation from the majority of people out there in the world.
....no doubt - your lack of life experience is shining through loud and clear.
I agree with this too. There was an article recently that today's $1700 return trip to London would have cost over $8000 in the early 1980s when I bought my first PPOR. After buying my tiny crappy house, I couldn't afford to upgrade my 1969 corolla (with the heater that wouldn't turn off - even in summer
) and I certainly couldn't afford to travel.Compare that to our oldest boy who bought his first unit a month after turning 21. It was dirty, smelly, needed complete refurb. He did the kitchen with a little help from hubby, got friends (and us) to help paint, but mostly did the hard yards himself (photos in my gallery). It was not his "ideal" house, but it was a starting point. That was three months after travelling to New York for three weeks and on a salary of $38K. His salary has increased to about $50K now and he has rented that unit and bought half share in a house and done a major renovation on the house.
If you want something badly enough, even on a low wage, it can be done.
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Population density is a more important factor than the overall population number. Some scary numbers below:
Hong Kong 6480/km2
London 5286/km2 (City of London) or 1510/km2 (London metropolitan region)
Sydney metropolitan area ~362/km2
Doubt it'd ever get to the same level
I also just had a look at London prices and outside of the highly prestigious areas, it's pretty much the same price as most Australian capital cities. Certainly better value for money considering where you'd be living. In my very quick 2 minute search, I found one three-bedroom apartment for 410k (AUD) that was 10kms from the CBD and within walking distance to several tube stations. Good luck with getting similar, even one that needed renovation, in any capital city in Australia.
Apart from that the salary in Hong Kong did not increase much in last few yrs. Everything is inflated: Job title, Work load, working hrs, living cost .. everything except your salary. Their inflation rate is well above 4% before June last year. Apart from that the previous government had investment migration scheme (mainly for people from China)... as long as you do investment (including property) with certain amount of money then you can apply permanent residency. Most of the developer built the apartments at that time (and set the price) just for them but not for what local wants. Therefore the government now cancelled this scheme also put something like CGT (they called it SSD - Special Stamp Duty) to slow down the market.
I agree with this too. There was an article recently that today's $1700 return trip to London would have cost over $8000 in the early 1980s when I bought my first PPOR. After buying my tiny crappy house, I couldn't afford to upgrade my 1969 corolla (with the heater that wouldn't turn off - even in summer
Compare that to our oldest boy who bought his first unit a month after turning 21. It was in need to a major refurb. He did the kitchen with a little help from hubby, got friends (and us) to help paint, but mostly did the hard yards himself (photos in my gallery). It was not his "ideal" house, but it was a starting point. That was three months after travelling to New York for three weeks and on a salary of $38K. His salary has increased to about $50K now and he has rented that unit and bought half share in a house and done a major renovation on the house.
If you want something badly enough, even on a low wage, it can be done.
All very fair points.
Some things have gone down a lot in price as well. Cars are a good example of this. It takes far fewer weeks on an average wage to acheive the purchase price of a new commodore than it did 30 years ago.
But, I think we need to look at Sydney prices, as that is what the article is referring too. Plenty of places around where the increases have not been anywhere near as dramatic. It's quite easy to get a decent, liveable house in Newcastle for the 240k mark, as an example.
I think that the original writer who was bemoaning the tax breaks given to investors by way of negative gearing probably works in Sydney but doesn't like the idea of the long commute associated with buying in an area of NSW that he can afford.
I can understand that as I find Sydney a nice place to visit but I wouldn't want to live with the traffic congestion. Probably one of the reasons places like Adelaide, where I live, score higher on liveability scores. Too bad we no longer have the employment opportunities in his field and others that we used to as local television production moved interstate years ago along with corporate head offices. Managers just fly in and out these days.
Sydney is an international city with a large population and limited land area in the desirable North/East side of town. Combined that with many, many successful people in business/corporate working and living there - you will get massive prices in those areas for sure. I don't find that surprising at all. These people pay cash for properties.
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