What I was saying about changing the way we live is why back in the day it was 3 times your income for a detached house...crap house prices will affect the way we do business in the future.
Can you provide an actual example of this?
I'm sure it did occur, but we need to compare apples with apples on this argument.
If you consider that back when I and my parents were kids, the "normal" house was a 2 or 3 bed house, one loungeroom. one bathroom, maybe a detached garage, or a carport attached to the house...approx 11-14 squares, then yes; I'd say it was doable.
Of course; this was in an area like an outer suburb - my PIL's bought a new home in Noble Park back in the early 60's, and it was basically out in the sticks - surrounded by vacant blocks and market gardens mostly; for $11k.
It was a 3x1 with 1 lounge and bathroom/laundry. They have since added another small living, bedroom, ensuite - house is currently worth about $400k at a guess?...it is tired and run down though.
But now; Noble Park is a middle ring suburb, and in demand. Of course the properties will cost more, becuase there are more folks who want to live in the area, and it is closer to the human race - unlike 50 years or so ago.
But, take the same house, remove the extensions, move it out to the "new" edge of civilsation and price it.
This is the only way you can compare apples with apples.
You can't compare a 2x1, or a 3 bed townhouse etc in an inner suburb, because even way back then the inner suburb demand was there and prices were unaffordable to the majority of folks.
Hence; places like Burwood, Boronia, Noble Park and so forth sprang up on the outskirts...cheap and more affordable (still not easily affordable) but with a commute.
Bigger mortgages, less ability to spend on business or everyday things to stimulate the economy..
A bigger mortgage is a choice. If the Banks suddenly said you could only have a 70% lend, then folks would have to do it. But no; they can get a 90%, or more with LMI, and buy a more expensive you-beaut house.
Imagine what they would look at buying if they opted to only get a 70% lend.
And to clarify this all, I believe every city in this country is affordable except Sydney.. That's why I been telling my mates to get the hell out of the Sydney market as much as they can.. I'm still gonna invest but it's gonna take a lot for FHB to get into the sydney market in future.
I agree. Sydney is now out of control and any sanity has disappeared. Great for sellers atm.
This country really needs to push business more than property in the next 10 years more than ever so all our wages grow and catch up..
Now that we have a global economy; this will be harder to do.
The only way it will happen is if the service industries grow. Manufacturing is declining (due to wages and other high costs), and any larger companies who can move their services to an O/S base and provide them from there - are doing so or have done so.
The good news is that if wages continue to be slow, then eventually the prices will stagnate/correct a bit.
So FHB's now have a good opportunity to get ready with a strong savings plan.
Just my opinion.. Times change but the great Aussie dream of owning your own home will slow die for our future generations
It is not dead, but the steps required are not being recognised by the FHB's.
The steps are;
1. Start saving hard and early.
2. Take on more work to facilitate step 1.
3. Cut out spending to facilitate steps 1 and 2.
4. Lower expectations about property type, condition and location.
This will get them into
property no.1
Then, like everyone else has had to do; you continue on with the above plan, and then upgrade to the more you-beaut property later on if you wish.
of course all the baby boomers are dead and all their properties hit the market haha
Baby boomers who have done well have followed the above plan. FHB's may want to learn from this instead of slagging them/us off and tall-poppying them/us.
Plenty didn't follow the above plan - my whole working life has been surrounded by and in the service of this demographic.
They have retired mostly broke in large numbers, on a pension (or part pension), living in a much more modest house (or never having moved from their first house like my PIL's); or they are even renting or living with friends and relatives.
Some have done well, of course.
Most well-off baby boomers are living in areas that are clearly not FHB territory, and/or retire to areas (such as where I live), which are also not the desired selection of FHB's.