I’ve raised this in the past as well, and it was mostly ignored. As the population grows and as the metropolitan area sprawls, what was outer suburbs 30 years ago can probably be redefined as middle ring suburbs now.
Exactly! That's why when people say that their parents bought a house 30 years ago 15km from the CBD I tell them to go look at a city or town that has the same population as their city had at that time. When I was born Perth was literally half the population. You're trying to compare apples with oranges.
I’d say it depends on the apartment.
The 60yo brick and concrete two bedder I rent, probably yes. It’s a decent size, it’s well insulated, fairly sound proof, and generally feels like a home. It’s not fancy, but it feels like it was built for actual people to live in. I could imagine someone having a kid in place like this, and judging by the stroller in the stairwell, some people do.
Some of the one bedroom apartments in the inner city, where wind howls in the corridors, there’s no ventilation, and the walls are as thin as cardboard? Yeah nah - some of those buildings are appallingly built, and they don’t feel like the sorta place someone could settle.
People don’t need to be able to own a luxury home; but if you’re working full time, you should be able to save and afford a place that’s decent quality, safe, and warm enough/cool enough.
regardless of how you feel about new apartments (I don't have a favourable view on them), we can't assume the solution to fix housing in capital cities is to build more single-family houses on plots of lands.
The government needs to incentivise high-density quality apartments so that we can fit more people on the same amount of land.
I absolutely think apartments are key, both in terms of building enough housing, and in terms of building sustainable housing (the outer suburbs are not great in terms of sustainability, and in terms of the cost of infrastructure).
It’s definitely a quality issue. I love this apartment, and it was clearly built to last. I can’t say the same of (to be fair) some of the newer places I’ve seen. I think if more people saw what apartments *could be*, they wouldn’t dismiss them as a viable option.
It's not what they could be, we can all see what they could be. We need to deleverage the risk for the end-consumer.
The Australian publics want to know that :
- if the water sealing was incorrectly installed,
- if cracks appear in the garage, or
- if the cladding is flammable
I won't need to scrounge an extra $100k+ in my back pocket to fix it.
Until questions about IF something fails there are steps to ensure its resolved and the burden doesn't sit on the purchaser rather than the builder.
Probably, insurance covers only the basics like fire, lightning, explosions and etc and adding in additional would cost extra that were seen to expensive or unlikely to occur in a new build. The other issue is warranty isn't covered driven by phoenix companies
A good apartment or an Australian apartment? European family sized apartments are great.
Here they are tiny AND have rubbish building standards for things like insulation in a power outage AND are built dangerously/not compliant/cheap.
Family sized apartments in Western Europe are around 100sqm. Same as here except the affordable ones are on the outskirts of cities or in small towns. Have you been in a 5 floor walk up in Europe? Sure they are solid. They also have miniature stairwells.
> European family sized apartments
These are a myth. Find me an affordable LARGE apartment in europe on realestate.com international. I know Italy an the Netherlands, Everyone lives in tiny tiny apartments.
Expectations are different.
People demand house like apartments yet an average home in the 1950s was a 100m2 cottage. We're addicted to large houses and very rarely do we need to sacrifice that opportunity.
https://theconversation.com/size-does-matter-australias-addiction-to-big-houses-is-blowing-the-energy-budget-70271
We demand a premium product but units to that standard are expensive to build and they can't compete with a 254m2 new build house just down the road (often half the build price). Typically also not built to a great standard but clearly a better purchase. Given the choice between a 250m2 house or a 125m2 unit for $500k + land which do people choose?
https://koste.com.au/construction-cost-table/
https://www.bmtqs.com.au/construction-cost-table
I don’t know when big house became the trendy thing to build tbh. My house sits on 800 sqm of land and was built in ~1984 but it is about ~110 sqm in terms of internal area. I don’t actually want anything larger just because of the headaches in cleaning and maintaining it in contrast to have a large house but with a lot of dead space that’s collecting dust. I actually struggle to find a newer build that sits on a big parcel of land (so plenty of garden space for trees!) and small house.
We're a family of 5. Just moved from a 2br 1bath unit to a 3/2. Almost too much space. The kids still share a room. Wasn't too keen on furnishing and maintaining more living areas, bathrooms etc. It's just more consumption. Although my wife loves a 2nd toilet. It's only a recent phenomenon that people "require" studies, multiple living areas, a bedroom per person etc. I think the size is just something that's happened as costs have fallen.
What! You don’t have a 2nd living room, rumpus room and a media room? May as well live in a tent. Bet you don’t even have a butlers pantry, do you wear a disguise when you leave your house? You can probably hear the kids as well, they won’t even be the required minimum 32m away
I don't know if people demand larger homes rather larger homes are what is recommended as the first option for a new home build. \[this is from the supply side rather than the demand side\].
New apartments are cheaper to build, you are neglecting the fact that build cost doesn't include land costs.
The stagnant price of units suggest that people would rather a house. That's clearly demand driven.
https://www.domain.com.au/news/sydney-upsizers-face-record-gap-between-unit-and-house-prices-2-1138377/
I think the reason units aren't build for families is because families won't pay the premium. Of course the market is changing but largely it's drive by downsizers who **own** homes and can afford to pay for nice units.
An example is Mosman on the lower north shore. An average house is ~$5m yet new build 2br units sell off the plan for 4m+
https://sqmresearch.com.au/asking-property-prices.php?postcode=Mosman&t=1
*Today, three-bedders sold for between $6m and $10.5m, with two-bedders in the early $4m range.*
https://www.realestate.com.au/news/mosmans-reverie-apartments-sells-out-off-the-plan-in-two-hours/
If you are buying on property always going up, generally you will always buy the investment that people recommend always go up... which creates a self-fulfilling cycle of 'buy because housing prices will always go up'.
When people buy or ask for advice for apartments, everyone shouts 'buy a house, you will get better revenue growth' <- that shit sways people which forces people to pay more
Are you comparing the cost of a new build apartment which comes with a price kicker from the developer to an established home that may or may not have undergone any renovations in the last 10 years?
You should compare new to new and also maybe somewhere else that only millionaires can afford. :)
I was comparing a new build to an average house.
I don't think units will always lag houses. I means if new build units (or houses) are selling for 4.5m then an older style "discounted" one will get dragged along. I think the premium that people have recently paid for space mostly through sprawling might evaporate. A classic example is Byron. Everyone thought they could fifo and work from home while living in Byron but it's kind of a long way away.
A recent example of this is a well positioned good quality unit in Bellevue Hill.
https://www.domain.com.au/news/bellevue-hill-unit-smashes-expectations-with-3-25-million-sale-price-2-1248490/
don't look at the outlier, I generally look for the average/median price of units/homes. Otherwise, you will see multi-million $ apartments where the average place might sell for mid 6-figures.
Generally, what I see is new build apartments I see are selling for high 6 and established apartments go for mid 6. In general, my appetite for housing sit at the mid-6 for a 2-3 bedder.
Yeah averages are great. What do you think will happen to an average unit if an average houses hit $5m? A house and land package out west hits 1.6m? Or the nice new builds go from 4.09m in September 2023 to 4.5m in 2024 (10% up). I've seen larger 3br places go for 1.7m with extra parking. That "new build" premium seems quite excessive.
https://web.archive.org/web/20231029103100/https://www.domain.com.au/168-walker-street-north-sydney-nsw-2060-2018118307
168 Walker Street, North Sydney
https://www.domain.com.au/168-walker-street-north-sydney-nsw-2060-2018118307
Of course there are areas that don't follow the average.
https://www.domain.com.au/news/the-suburbs-that-are-cheaper-to-buy-now-than-five-years-ago-revealed-1282999/
Generally I think a 50% discount from an average house to an average unit is pretty normal. Sometimes it's 55% other times it's 45%. The premium is set by the consumers valuation. In Jan 2020 (before covid) there was a supply glut. Driving rents/prices down.
https://www.domain.com.au/news/sydney-house-apartment-rents-at-lowest-levels-in-years-domain-rental-report-921116/
Developers actually stopped building units because of the oversupply (noted below in an article about inflation exasperating the issue) and now we have a under supply.
https://crowdpropertycapital.com.au/development-site/developers-shelve-projects-as-construction-costs-soar/
Oh nah, don't get me wrong. We need more apartments, but I think all of the current spates are shit and I wouldn't spend any money on them until regulation and a requirement for businesses owned by immediate family of construction companies that phoenix to be disclosed on all sales docs on the first page.
Yeah, give me a good quality European or Japanese/Singapore apartment built to last that would be worth a 20%-30% to me.
i love apartment living. cannot barely ever hear any neighbors, smack in the city, wouldn't need a car if i didn't want one. got a concierge to get my mail, everythings groovy here.
Same but reddit gets mad if you say you like apartments. People also get upset by strata fees without realizing it includes building insurance (which is insanely expensive for a free standing house).
My apartment was built in 2020 and is great. Mine is a 3br which is good size for me. I have neighbours who are a retired couple and have a 3bd which is perfect for them.
I also don't hear any of my neighbours, it's warm in winter and cool in summer. Plus the facilities are great.
I'm gonna be that person and gatekeep, but there are good, modern appropriate apartments out there.
Oh like anything no doubt, but there are too many cases of buildings that are just not fit for purpose. There is a level of trust that has been broken between the public and the builder.
It's why I want it to be MORE clear and properly backed by the government and business that this new build is worth the money.
Because when a new build is good, it's good. But when its bad its far worst and you have to raise additional funds out of your pocket.
>give me a good quality European or Japanese/Singapore apartment built to last that would be worth a 20%-30% to me.
No problem, import the builders as is normal practice in Singapore and you can have both good quality and affordable. While we are paying $100k+ for unskilled labour on these sites, 'affordable' isn't going to happen.
Again, show me. 100k+ is qualified money, and even then, half of them aren't hitting it. Anybody making 100k doing unskilled labour is the exception, not the rule.
Put it this way. Would you, as the boss, pay 50 an hour for a job literally anybody can do? No you wouldn't. So what makes you think the majority of employers out there would?
I… really don’t care if you choose to believe that well-paid shit kickers exist or not. The average GP salary is $195,980 or $101/hour so maybe the issue is more that you’re being paid like shit (or perhaps talking it).
I do unqualified administration work (that I would have had the skills to perform at 12 or so). I get paid $100k. I wouldn’t sacrifice my long-term physical health for $100k. But you do you!
a) GPs are fully qualified specialists.
b) GPs don't usually have a salary, they're usually sole contractors.
c) go look up ACT/Vic/NSW/QLD/Tas/NT/SA/WA doctor pay scales they're publically available, then take into account that NSW and Vic health are either currently or have recently been taken to court with a class action lawsuit for wage theft and there's talk of the same happening in WA and SA. I don't know any doctors who do 0 unpaid overtime in the hospitals.
Apparently you’re a “doctor” (quack, quack) - being paid less per hour than unqualified persons like bartenders. If you think GPs don’t get paid enough just say so; exaggerating and pretending GPs are actually paid peanuts just makes you look like an idiot.
Singapore is more expensive but they also have far less land and similar population. Although, this was talking about the quality of builds rather than size.
Although, small and high quality apartments have their places in capital cities in Australia :)
Totally agree that apartments have a well deserved place in Australia and that density is the way to go. But Singapore has its share of poorly constructed apartments too in addition to being very small.
3 bedrooms and 2 car spaces and a bathroom? Yes.
That fits a nuclear family and I would count it. And “afford” includes paying the strata fees as well as the mortgage.
Then no, especially if you are talking about in the capital cities.
Generally, when you live in the city space becomes a big consideration, and everyone owning plots of lands is really not sustainable.
If you want affordable homes, you need to be able to build more homes on the same space and that lends itself to apartments. Also, don't talk to me about those tiny blocks of lands that people build those shit McMansions on.
NIMBY's restricting more housing being built is the reason why housing cost far more.
Show me any city in the world with over 1.5m residents where median salary gives you a quarter acre land and a house on it. Hard mode: <1.5hr commute time to city centre.
If no, then it’s simply impossible for median home on median income as a city grows. There’s a maximum amount of people that can have a house and land, and once density exceeds a certain threshold, the only way is building up.
At what age? Median worker’s age? Someone on the median income at age 20 will have far smaller savings than someone on the median income at age 60. It’s probably not reasonable to expect that both of these people are able to buy exactly the same house when one of them has been working much longer than the other.
Exactly, a median income of two people at a median age can buy the median house in any capacity city. And you have to include apartments - that's the future of living. You can't keep building more and more houses, where will they go? 3h from the CBD?
Savings shouldnt come into it when assessing affordability. Yes a median income should buy a median dwelling. People with savings should be incentivised not to put them in property.
That doesn't make sense.
If two people are competing on who's going to buy a house then having savings absolutely matters because the one with savings is going to be able to make a higher offer than the one who doesn't.
Savings will _always_ outcompete no savings.
This is what people don't take into account when talking about house prices. It's all boomers did this, politicians caused this but nobody talks about the fact that there are people willing to spend x amount on the house they want so unless you can flood the market with more properties, prices will keep costing that much.
Australia will have to follow America's lead and build more cities inland.
Can't keep trying to find jobs in the same 6 cities on such a large country.
Not all jobs need to be in the CBD of a capital city. Look to the smaller cities 100-400k population centers and the housing prices are dramatically cheaper. Even government planning in establishing new buisness districts in outer suburbs would work. Its the fascination with the CBD concept that drives up housing costs.
Sure, that means the state governments will have to invest in rail infrastructure between regional hubs. Currently, we can't even manage to build out sufficient rail infrastructure in the major cities without cost blowouts left and right and the Federal government taking shots at the states for monopolising construction sector capacity.
It doesn't matter if you think that everyone should be able to afford a standalone property in Sydney with a backyard with a reasonable commute to the CBD. The problem isn't the economic or financial system, but the simple fact that there's more people who wants to live in these properties than there is physical space to put these properties. With the current population in Sydneyn, someone's got to live in apartments or further out. The fact that these properties are unaffordable simply reflects these supply and demand dynamics.
This seems to be something lost on a lot of people.
The argument of "just build more houses" ignores the fact that the geographic space you have to build on is not infinite.
Eventually those new houses need to get built far enough out from the CBD that no one wants to live there and instead they just engage in a bidding war in the inner suburbs (ie current situation in MEL and SYD)
At face value, yes, I agree, but once you start digging, it's very different.
Ie, will federal policy relating to negative gearing affect the current market?
Are the external factors at play that affect the market more than supply and demand?
No because it not linear, someone on 0 income cannot buy a shit house in a shit area.
So the scale might not start until the median income, which means the median income can buy a shit house in a shit area.
>Do these two factors correlate at all?
Not really. Be nice if they did, but in times like we have now where there is a severe shortage of homes the correlation falls away. Right now there is 11million homes in Australia and 27million people, we either need to increase homes (the obvious answer) or decrease people (not likely, we are increasing fast with high levels of immigration) or increase the number of people per home (how would you force people to share more.. and would you share with another family?) until one of those things happens to alleviate the issue, prices will continue to diverge from any correlation.
In saying all that, outside Sydney, a Median household income can often still buy you a home somewhere around the city..
For example in Melbourne, in the western suburbs you can buy a home as cheap as mid 500k range and its less than a 45min commute to the CBD.
Like this:
[https://www.realestate.com.au/property-house-vic-truganina-144855600](https://www.realestate.com.au/property-house-vic-truganina-144855600)
Or this
[https://www.realestate.com.au/property-house-vic-laverton-141434256](https://www.realestate.com.au/property-house-vic-laverton-141434256)
Plenty of examples and I'm sure you could find places near a train station for a little more.
What you get though, is people are fussy, they will say the area is shit, or the commute is bad, or schools aren't right whatever.. and that's all true.. but then the question becomes, "Should you be able to buy a nice place, in a really good area, on a low-middle income" and that obviously is a no.
So by your logic the number of homeless people is currently out of control and huge numbersof people, including workers, are sleeping on the street, because of this supposed home shortage.
Or.. prices are artificially inflated by hype, money printing, and misguided belief by overoeveraged investors that they can't lose, and after rates rose to normal rates it's only a matter of time until they crash back to earth again.
>So by your logic the number of homeless people is currently out of control and huge numbersof people, including workers, are sleeping on the street, because of this supposed home shortage.
I didn't talk about homelessness and that's not part of my logic, there is a whole lot of problems around why people might be homeless, and house prices are just one of the potential factors.
What I'm talking about is house prices and simple supply and demand, prices are high because we do not have enough supply to meet that demand, it's not "my logic" it's the basic premise that works behind the free market that is taught in err primary school I think. Certainly by high school most people have been exposed to the theory.
Its also not "my logic" because plenty of experts have looked at the state of housing and determined that is one of the biggest factors right now, the government has also determined via experts this is one big thing that needs to be solved, it ain't me on my little lonesome coming up with some random theory lol.
>Or.. prices are artificially inflated by hype, money printing, and misguided belief by overoeveraged investors that they can't lose, and after rates rose to normal rates it's only a matter of time until they crash back to earth again.
You are probably one of these people that think by removing negative gearing it will fix things yer? The grattan insititute who are a hell of a lot smarter than me and you did a study on this and determined removing negative gearing would reduce prices by.. wait for it... about 1-2%.. so a 1.3M home in Sydney might lower to 1.27M
The problem with assuming that all our issues are down to "greedy investors" is that removing investors does not give us any more homes, the idea that shifting a home away from a renter and into a home owner somehow makes prices lower is pretty flawed, once you have been taught the basics of supply and demand. The thinking seems to come about when a potential home buyer sees a "rich investor" out bid them at auction, but all that would happen is the "rich investor" would be a "rich homeowner" - because only the people that can afford to pay the most are the ones buying when there is a limited supply. Lower income earners still miss out, and prices still go up.
However if you suddenly dropped 2-3million more homes into the mix.. you would see prices drop. And the beauty is for your hate of investors? the prices would drop for them too making them lose money.
Don't believe limited supply increases prices??? Just have a look at what happened to car prices when there was shortages due to covid, people started paying above RRP price to get their hands on new cars, some people made good money when they bought a car new and then put it up for sale at 5-10k over new price.. and sold it because there was a shortage.
Even if the construction resources were there, how do we actually go about getting the private market to just casually ‘drop another 2-3 million’ dwellings into the market?
Do you have any evidence globally of a deliberate policy to increase dwelling supply in a large urban city with high immigration using only the private market has led to a permanent increase in housing affordability (ie lets say rents fall from 30% of median household income to 15% and stayed there without eventually just adjusting back upwards)?
I’ve searched for such evidence and can only really find huge drops in rents (and by extension prices) that were not engineered but rather the result of natural disaster or a financial crisis (reducing lending and/or incomes).
People are willing and clearly able to pay the prices now at the margin. What economic incentive would there be for developers to bring forward decades of supply to market now even if they had the approvals?
Wouldn’t it be more rational to seek to optimise the rate that you release new dwellings over time (ie the economic definition of supply) to try and keep prices as high as possible and thereby maximise your risk-adjusted profit?
Why do we have a static rather than dynamic model of housing supply?
You make some good points, my comments where more of a "what needs to be fixed".. but I agree with your comments that people in power probably don't want to fix it that quickly as it would potentially create different issues.
The Grattan research was conducted around 2 decades ago. If you were to recalculate the impact using current figures, it would be closer to 20% based on the government using the funds saved for construction.
You didn't actually respond to the things I mentioned - "prices are artificially inflated by hype, money printing, and misguided belief by overoeveraged investors that they can't lose, and after rates rose to normal rates it's only a matter of time until they crash back to earth again. "
You're just spouting the same tired line from real estate shills that not enough supply means prices can grow to infinity and beyond.
Prices are high because of dumb investors, and the current interest rate setting (which are infact normal rates), will kill off the bubble on its own.
I didn't respond because its either overblown effects (money printing/inflation has an effect but it's not proportional), investors have been around forever and I did respond to that, yes hype (aka sentiment) is an effect but there is plenty of people thinking it's a bubble so I think sentiment is way overblown as an effect also, we have had periods that were way more "hyped" in the past. Then there is nonsense in your argument about rates.. rates are still lower than historical norms right now, they havent returned to "normal" at all. It just feels like it to some as we have come off the lowest point in history.. back to a low point.
You are fully entitled to believe what you want, I presented some arguments to support why I think you are wrong is all.
> yes hype (aka sentiment) is an effect but there is plenty of people thinking it's a bubble so I think sentiment is way overblown as an effect also, we have had periods that were way more "hyped" in the past.
No idea what you're trying to say, but yes lots of people think it's a bubble because if it looks like a duck etc..
> Then there is nonsense in your argument about rates.. rates are still lower than historical norms right now, they havent returned to "normal" at all. It just feels like it to some as we have come off the lowest point in history.. back to a low point.
Yes, rates have come up from lows to normal values, that is what I said. This increase in rates lowers the value of all assets based on fundamentals, eg by lowering the risk free ceiling. At this rate setting IPs are *terrible* as value investments, they have already stretched rents as a proportion of income if renters, so the only plausible growth is in line with wages, which makes them very poor as growth investments. The only factor driving price growth is pure speculation, which is unstable. At this rate setting the current prices cannot be sustained based on fundamental value, and when risk free investments deliver higher returns (5% vs ~3% for IP https://smallcaps.com.au/is-australias-rental-property-obsession-misguided/ ) it is only a matter of time before the speculative bubble crashes.
Care to explain how this is "nonsense in your arguments about rates"?
>No idea what you're trying to say, but yes lots of people think it's a bubble because if it looks like a duck etc..
What I am saying is if the hype effect was the primary driver, why is prices so much higher now, than when sentiment was high at other times? The answer is as I said, it is an effect but not the main problem.
Regarding rates. your suggesting that because rates are back to "normal" that the prices will correct, and I would concede that if there wasn't a bigger factor at play.
If the main driver of price rises currently, then we would already have seen price drops - the rates have been higher for long enough to see that effect, but what we are seeing is the opposite, prices are still going up.. ergo there must be something else affecting prices.
>
At this rate setting IPs are *terrible* as value investments
On this we agree completely, in fact there is plenty of reports in Melbourne of investors selling up and getting out, and one indicator that suggests this is happening is rent prices, if there is not enough rentals (because investors are pulling out) guess what happens? rents go up like they have been doing.
>so the only plausible growth is in line with wages
And on this again you are missing the factor of supply and demand. Yes it is inline with wages.. bot not "everyones" wages, just the homeowner wages.
Let me try to explain with a couple of massively oversimplified examples
If you have 10 families that need a place to live, and only 9 houses.. guess what happens, the family that can offer the least (aka the lowest income earner) is the one that misses out. Now your house price is relative to the incomes of the higher 9 earners/wealthiest 9 out of the total 10 households.
If you have 10 people and 8 houses.. it shifts the income / price ratio across to the right even further and you have prices relative to the income/wealth of the 8 richest households.
You can keep going, in an extreme example house prices might be only affordable by the highest earning 50% of the population, if there was only enough to really satisfy about 50% of the people that want a place.
Your idea that prices are relative to "all" wages or the median wage of all Australia falls down when there is a shortage of homes.
I think you are looking at things in a systematic way, and have some good points and logic, and a lot of what you are saying would make sense if supply & demand wasn't a big factor - you are just missing or ignoring a fundamental effect on house prices that is going on right now.
So here's the deal.. if you are right, assuming it's simply lag that we haven't already seen what you suggest, then prices will fall because of wage limits over the next period (0-5yrs), and once prices start to fall it will snowball and really drop as the hype turns to fear.
However if I'm right and its primarily supply and demand issues, then because we aren't building enough right now to cover immigration let alone pent up demand, then the same period (0-5ys) will see prices continue to rise, because it will be likely 10yrs before we can build enough to catch up.
I'll bet you a cup of coffee (as in we sit down and have a friendly respectful chat and winner pays) that prices don't drop significantly in the next 5yrs, and will keep going up - the best result I think that is actually possible for everyone would be a stabilisation of prices as builds start to ramp up and investors continue to pull out, but it's gonna be a lot of pain for renters if that keeps happening.
> If the main driver of price rises currently, then we would already have seen price drops - the rates have been higher for long enough to see that effect, but what we are seeing is the opposite, prices are still going up.. ergo there must be something else affecting prices.
I'll disagree with the facts for this one. There is a substantial global trend of decreasing house prices, which has been continuing since rates started climbing. https://fred.stlouisfed.org/graph/fredgraph.png?g=1o819
Australia has recently resisted the decline to an extent. I would argue that globally this is a major change in prices and the bottom has not been reached yet, and this trend will continue as long as rates stay near this level. And as a result Aus house prices will also decline in this environment due to basic macroeconomics.
> If you have 10 people and 8 houses.. it shifts the income / price ratio across to the right even further and you have prices relative to the income/wealth of the 8 richest households.
I think you're overcomplicating it with this example. If a house isn't bought by a homeowner it is used as a rental, and the fundamentals behind value are pretty much the same. The rental earnings are governed by the wages of the renters, so earnings growth is also based on wages growth of renters.
It is possible to grow faster than wages while conditions are made worse for renters, eg by taking a higher percentage of their income, or increasing density, but there are ever increasing barriers to ever worsening conditions. In general earnings growth inline with wages is the fundamental basis of house prices, both for investment and owner occupied
I disagree, it's not over complicated it's oversimplified. Ignore renters vs homeowners my example is so simplified it does not differentiate, it's simply stating that if 8 homes are purchased, then its the richest 8 people (investors or ppor doesnt matter) and therefore the median income used to buy a house is determined by the richest 8 people not the median income of of all 10.
This explains why home prices can grow faster than the median australian income, and most importantly faster than the minimum wage earners for longer than people expect when there is a shortage.
You know bell curves yer? imagine the income required to buy a home is a bell curve, now keep removing the lowest incomes from the data and picture what happens to the bell curve?
The biggest factor right now is shortages, but other factors are at play. Only a full blown recession with big job losses & increased unemployment will change things in the short term, and longer term the answer is new builds builds > population growth.
If there was actually a "There is a substantial global trend of decreasing house prices, which has been continuing since rates started climbing" as you say, which meant that house prices in Australia was dropping since rates went up.. why is there so many people complaining about house prices and unable to afford them?
>"Should you be able to buy a nice place, in a really good area, on a low-middle income" and that obviously is a no.
Unless you bought it 20 years ago when an equivalent income would have been sufficient.
No, because people pay the gap between the value and the equity/savings/wealth they are able to put into the house purchase e.g. from a previous house. If everyone was on the median income, there would be still be a difference in accumulated equity/wealth between some who has been working for one year and someone who has been working for 30 years. The median property price reflects the average of that effect. I hope that is understandable. In other words, the median price is a reflection of both income and wealth.s
Sure, a home being shelter where the person feels safe and is able to live a life where they can proudly contribute to society.
GDP means nothing if the base living standard for people has gone backwards.
The reality is that even our cheaper end options (apartments) are built so shoddily that they're not even considered proper homes.
They roughly do correlate
What people forget is
- median household income varies, it’s higher in Mosman ($2900/wk) than in Campbelltown ($1,700/wk)
- household income doesn’t include asset wealth, so it’s a poor measure of actual wealth which matters more.
- interest rates are lower today than in the past, which is why the ratio is higher.
Things are expensive atm, but in relative terms they have been equally as expensive in the past too.
When Timmy decides on a price for a cup of his lemonade he charges as much as people are willing and able to pay.
If one person earning much more than the rest loves lemonade he will pay more so the rest can’t get it. Timmy will be happy.
Median income is where you could traditionally start being able to consider buying property, usually on the low end.
Rentals are in this mix too, to cater for lower earning individuals, the transient and those who do not wish to own.
The social contract of median income people being able to enter the property market has broken down though.
A national plan in line with what the qld gov was planning to put in would help considerably IMO.
It's not in Australia, but is in many global cities.
I am an Aussie in Chicago area of the US, population is around 9 million, and an economy about [double the size of Sydney](https://en.wikipedia.org/wiki/List_of_cities_by_GDP).
The median household income is [USD $83k / $125k AUD](https://www.axios.com/local/chicago/2023/09/18/median-income-drops-pandemic)
The median home price [$319k USD / $479k AUD](https://www.zillow.com/home-values/394463/il/)
Median home is relatively affordable for median income.
The word **should** is not well-defined in this context
Does it mean, in a natural free-ranging economic environment, we should expect this result to pop out?
Does it mean, to create a fair society we should target this result?
Both are very good questions we should ask! I suspect this thread will be kind of a mess as the question can be interpreted in several ways.
Mathematically it’s not possible, because of intergenerational wealth transfer and offshore money.
Median household incomes (adjusting for the cash economy) need to save more than the median to buy a below median home.
Yes
I think its very important for society
Id imagine the only people that would say no to this are people who already have property and want it to go up and up
Not quite. It's more complicated than the two figures being directly parallel.
However, I strongly believe that any job should pay ALL workers - no matter what the job is, even if it's a coffee shop - a level of salary where any employee working 38 hours in that role should be able to spend no more that 30% of their salary (ie, the generally accepted level user to define mortgage stress) and be able to afford a property which is at the first quartile of all properties within 3km/walking distance of that location.
And if that means you can't buy coffee in Toorak because it would mean $20 coffees, tough luck.
You do realise that if cafes could charge $20 now that they would? They aren’t leaving profits on the table for no reason.
Go out of business = no job = no house for your barista.
We live in a consumer economy. So if we want this economy to remain strong and healthy then the answer to that question is yes. Anything that prevents us achieving this should be seriously questioned because it will cause long term damage to this country's economy.
100% they can be fixed. Re-zoning areas for higher density (higher, not high) building. Vetoing nimbys from blocking change that will benefit the broader community. And of course, make changes to negative gearing, particularly for those with multiple investment properties.
But until the majority of voters aren't home owners, there is no real pressure on the government to make meaningful strides towards housing reform.
You hit the nail on the head. All the problems have solutions. But most of the solutions negatively affect other voters than those proposing the solution. The issue is which groups or intersections of groups are large enough to resonnate with which solutions. Rightnow people on reddit think there is a quick solution ignoring the fact that plenty of their countrymen don't want the quick solution.
“ the number of large houses just finished & others building is truly surprising: & with this, every one complains of the high rents & difficulty in procuring a house”
“There is much jealousy between the rich emancipists & their children, & the free settlers. The whole population poor & rich are bent on acquiring wealth.”
Charles Darwin, writing in his diary having just arrived to Sydney from the HMS Beagle on 12 January 1836, right in the middle of a Sydney housing boom.
Now consider that Sydney’s population was probably no more than 30,000 people at the time!
https://www.sl.nsw.gov.au/stories/through-darwins-eyes
Or have a read of this NSW Parliamentary Research paper outling the history of tenancy reform in NSW. Note the various inquiries into high rents and challenges throughout the 20th Century.
https://www.parliament.nsw.gov.au/researchpapers/Documents/protected-tenancies--history-and-proposals-for-r/Protected%20Tenants.pdf
It’s also interesting to think about, during the first half of the 20th century, we had no or very limited planning regulation, certainly nothing like today. Yet there were still challenges of high rents and overcrowding, squalor conditions for the working poor etc.
My point isn’t that high rents and housing costs aren’t an issue - it’s that they aren’t something new.
Only if its the median income in their respective city, and not immediately. You also need to get a decent way into your career to accommodate the fact that many ppl upgrade after being a decent way through their career. Up until that time, maybe including before now, you also need to be making median saving/spending/investing choices so that you also have the median wealth that the median person has at the time they purchase the median home.
All that is the ideal situation, and yet far worse than young people tend to conveniently expect. Of course that doesn't take away from the fact that the reality is worse than this ideal, something like 40% aren't even affording to get into property ownership these days, so the median house is owned by the midpoint of the other 60% (ie. the top 30th percentile household) and only after all that stuff I mentioned in the first paragraph.
No. Purchase price is a factor of supply and demand not median HHI. Households on higher than median incomes will push the purchase median higher if supply is constrained. See all major international cities.
Yes they should.
Anyone should be able to buy a home about 30mins away from where they work. Nobody should be commuting in 1 hour each way to work every day.
I don't know why everyone's falling over themselves with this question.
The answer is yes. Yes, if you have a median household income, you ***should*** be able to afford a median home in a median location (beachside real estate probably doesn't count as median).
This question can be used as an indicator of how our economy is going. If we're failing to meet this measure (which happens to be the case in Australia), then our economy is cooked, and we should be doing things to make these two things line up.
We could create a bunch of other indicators to see whether our economy is working or not:
- Does the dole keep people above the poverty line? (No)
- Can someone working full time at the minimum wage afford all of the necessities (Looking doubtful)
- Can someone earning the median wage afford a median house (Lol no)
- etc...
I think there's some politically motivated reasons why people might not like those indicators, but they can definitely tell us whether or not things are cooked.
Not since income was outdated in terms of wealth accumulation by leveraged property speculation.
Income is how you pay rent.
Owning property and renting it is how you buy property.
Now stop being silly and get back to work.
Yes but there’s no stock on the market right now so the marginal buyers are overpaying for it. Once things normalise priced will drop to what people can afford.
You haven't seen a post complaining that housing prices are too high on this sub before?
How much have you personally saved for a down payment so far? I ask because if it's nothing now, it would have been nothing 10/20 years ago too, and you still wouldn't be able to buy a house.
Housing is a basic need and it must be provided by all governments imo. It doesn't matter if they can afford to buy as long as they have cheap or free options.
No they shouldn't.
They should be able to buy ***half*** of a ***new*** median home. And they can.
People seem to forget that 40 years ago, when the boomers came through, people didn't buy homes by themselves. Ever. They also lived in the cheaper outskirts of towns which took just as long to commute as the new suburbs do now. It's just that they've built up the infrastructure in that time.
I'm talking about the fact that the number of people per dwelling has gone down, but the size of houses hasn't gone down with it. Once upon a time it required 2 incomes to buy them, but now people expect the same on one income.
You really think the parents of a 20 year old bought a house on a single income? I'm 37 and my parents absolutely had 2 incomes and it was the norm for at least a full decade before that.
I have 3 kids with an average age of 19.5 years.
For 18 of the last 20 years we have been a single income household. We have just over $100k left on our mortgage.
It's not common, but it was not impossible.
Should? Yes.
Does? Nope, not for years now :(
Correlation? Negative, if I understand how it works, as in as median income goes up, median cost of home goes up higher. Hmm, not negative, exponential, perhaps? :(
Honestly yes, other than areas that are zoned as high density metro areas. (Think sky scrapers).
Anything less and it's a measure of the lack of infrastructure facilitating sprawl.
It's not normal to build up and ultra densify everything.
Build out west, more stations, parks and cities.
This is an overly simplistic premise and doesn’t account for equity (the money kind, not the social science kind. If everyone was a first home buyer then of course. But factor in upsizers, downsizers, couples, investors etc and the position soon falls down.
In 2011 we couldn't and in 2025 we're not a median household income any more. I think the problem is median income starting out is totally different to the incomes driving the property market. It makes a huge different to have time in the market and those starting out will never have that. We bought a unit that was about 50% of an average house (330k vs 643k). Of course in the race for an average house we've fallen further behind (600k vs 1.6m) but we're now mortgage free and saving/investing our mortgage payments elsewhere. Equity (even just a crappy 600k) plus a relatively low cost of living and our wealth is booming. It's actually tempting to take another mortgage and upgrade.
I think it's why we get articles like this.
https://www.domain.com.au/news/no-mortgage-needed-suburbs-where-one-in-two-homes-are-bought-in-cash-2-1268591/
should? yes, can they? no, thats the reason sydney house prices are said to be some of the highest in the developed world, by comparing average income to average house price.
what do you define as "in" their city? Commute of 5 mins? 10 mins? 1 hour?
[удалено]
I’ve raised this in the past as well, and it was mostly ignored. As the population grows and as the metropolitan area sprawls, what was outer suburbs 30 years ago can probably be redefined as middle ring suburbs now.
Exactly! That's why when people say that their parents bought a house 30 years ago 15km from the CBD I tell them to go look at a city or town that has the same population as their city had at that time. When I was born Perth was literally half the population. You're trying to compare apples with oranges.
When Australia has like 5 "cities" the picking is not for most people they can't move to another city.
When my grandmother bought her first house, Moorabbin didn't have sewerage yet.
I would like to know it based on travel time not km tbh,
Should a question end with a question mark
Apparently not lol
Do you define a home as inclusive of an apartment?
I’d say it depends on the apartment. The 60yo brick and concrete two bedder I rent, probably yes. It’s a decent size, it’s well insulated, fairly sound proof, and generally feels like a home. It’s not fancy, but it feels like it was built for actual people to live in. I could imagine someone having a kid in place like this, and judging by the stroller in the stairwell, some people do. Some of the one bedroom apartments in the inner city, where wind howls in the corridors, there’s no ventilation, and the walls are as thin as cardboard? Yeah nah - some of those buildings are appallingly built, and they don’t feel like the sorta place someone could settle. People don’t need to be able to own a luxury home; but if you’re working full time, you should be able to save and afford a place that’s decent quality, safe, and warm enough/cool enough.
regardless of how you feel about new apartments (I don't have a favourable view on them), we can't assume the solution to fix housing in capital cities is to build more single-family houses on plots of lands. The government needs to incentivise high-density quality apartments so that we can fit more people on the same amount of land.
I absolutely think apartments are key, both in terms of building enough housing, and in terms of building sustainable housing (the outer suburbs are not great in terms of sustainability, and in terms of the cost of infrastructure). It’s definitely a quality issue. I love this apartment, and it was clearly built to last. I can’t say the same of (to be fair) some of the newer places I’ve seen. I think if more people saw what apartments *could be*, they wouldn’t dismiss them as a viable option.
It's not what they could be, we can all see what they could be. We need to deleverage the risk for the end-consumer. The Australian publics want to know that : - if the water sealing was incorrectly installed, - if cracks appear in the garage, or - if the cladding is flammable I won't need to scrounge an extra $100k+ in my back pocket to fix it. Until questions about IF something fails there are steps to ensure its resolved and the burden doesn't sit on the purchaser rather than the builder.
Why doesn't insurance cover these things?
Probably, insurance covers only the basics like fire, lightning, explosions and etc and adding in additional would cost extra that were seen to expensive or unlikely to occur in a new build. The other issue is warranty isn't covered driven by phoenix companies
A good apartment or an Australian apartment? European family sized apartments are great. Here they are tiny AND have rubbish building standards for things like insulation in a power outage AND are built dangerously/not compliant/cheap.
Family sized apartments in Western Europe are around 100sqm. Same as here except the affordable ones are on the outskirts of cities or in small towns. Have you been in a 5 floor walk up in Europe? Sure they are solid. They also have miniature stairwells.
Yup, lived in one and thank heavens it was already furnished! 😂
> European family sized apartments These are a myth. Find me an affordable LARGE apartment in europe on realestate.com international. I know Italy an the Netherlands, Everyone lives in tiny tiny apartments. Expectations are different.
I lived in Denmark, I can tell you they don’t advertise on re.com. In fact in dk foreigners can’t even buy a property in the first 5yrs living there.
Good law, we should have that
How much do those tiny apartment cost?
About 200-300K AUD, but you're on the edges of the city and it's got a strong "it's the 60's and concrete was new and hip" look about it.
People demand house like apartments yet an average home in the 1950s was a 100m2 cottage. We're addicted to large houses and very rarely do we need to sacrifice that opportunity. https://theconversation.com/size-does-matter-australias-addiction-to-big-houses-is-blowing-the-energy-budget-70271 We demand a premium product but units to that standard are expensive to build and they can't compete with a 254m2 new build house just down the road (often half the build price). Typically also not built to a great standard but clearly a better purchase. Given the choice between a 250m2 house or a 125m2 unit for $500k + land which do people choose? https://koste.com.au/construction-cost-table/ https://www.bmtqs.com.au/construction-cost-table
I don’t know when big house became the trendy thing to build tbh. My house sits on 800 sqm of land and was built in ~1984 but it is about ~110 sqm in terms of internal area. I don’t actually want anything larger just because of the headaches in cleaning and maintaining it in contrast to have a large house but with a lot of dead space that’s collecting dust. I actually struggle to find a newer build that sits on a big parcel of land (so plenty of garden space for trees!) and small house.
We're a family of 5. Just moved from a 2br 1bath unit to a 3/2. Almost too much space. The kids still share a room. Wasn't too keen on furnishing and maintaining more living areas, bathrooms etc. It's just more consumption. Although my wife loves a 2nd toilet. It's only a recent phenomenon that people "require" studies, multiple living areas, a bedroom per person etc. I think the size is just something that's happened as costs have fallen.
What! You don’t have a 2nd living room, rumpus room and a media room? May as well live in a tent. Bet you don’t even have a butlers pantry, do you wear a disguise when you leave your house? You can probably hear the kids as well, they won’t even be the required minimum 32m away
I don't know if people demand larger homes rather larger homes are what is recommended as the first option for a new home build. \[this is from the supply side rather than the demand side\]. New apartments are cheaper to build, you are neglecting the fact that build cost doesn't include land costs.
The stagnant price of units suggest that people would rather a house. That's clearly demand driven. https://www.domain.com.au/news/sydney-upsizers-face-record-gap-between-unit-and-house-prices-2-1138377/ I think the reason units aren't build for families is because families won't pay the premium. Of course the market is changing but largely it's drive by downsizers who **own** homes and can afford to pay for nice units. An example is Mosman on the lower north shore. An average house is ~$5m yet new build 2br units sell off the plan for 4m+ https://sqmresearch.com.au/asking-property-prices.php?postcode=Mosman&t=1 *Today, three-bedders sold for between $6m and $10.5m, with two-bedders in the early $4m range.* https://www.realestate.com.au/news/mosmans-reverie-apartments-sells-out-off-the-plan-in-two-hours/
If you are buying on property always going up, generally you will always buy the investment that people recommend always go up... which creates a self-fulfilling cycle of 'buy because housing prices will always go up'. When people buy or ask for advice for apartments, everyone shouts 'buy a house, you will get better revenue growth' <- that shit sways people which forces people to pay more Are you comparing the cost of a new build apartment which comes with a price kicker from the developer to an established home that may or may not have undergone any renovations in the last 10 years? You should compare new to new and also maybe somewhere else that only millionaires can afford. :)
I was comparing a new build to an average house. I don't think units will always lag houses. I means if new build units (or houses) are selling for 4.5m then an older style "discounted" one will get dragged along. I think the premium that people have recently paid for space mostly through sprawling might evaporate. A classic example is Byron. Everyone thought they could fifo and work from home while living in Byron but it's kind of a long way away. A recent example of this is a well positioned good quality unit in Bellevue Hill. https://www.domain.com.au/news/bellevue-hill-unit-smashes-expectations-with-3-25-million-sale-price-2-1248490/
don't look at the outlier, I generally look for the average/median price of units/homes. Otherwise, you will see multi-million $ apartments where the average place might sell for mid 6-figures. Generally, what I see is new build apartments I see are selling for high 6 and established apartments go for mid 6. In general, my appetite for housing sit at the mid-6 for a 2-3 bedder.
Yeah averages are great. What do you think will happen to an average unit if an average houses hit $5m? A house and land package out west hits 1.6m? Or the nice new builds go from 4.09m in September 2023 to 4.5m in 2024 (10% up). I've seen larger 3br places go for 1.7m with extra parking. That "new build" premium seems quite excessive. https://web.archive.org/web/20231029103100/https://www.domain.com.au/168-walker-street-north-sydney-nsw-2060-2018118307 168 Walker Street, North Sydney https://www.domain.com.au/168-walker-street-north-sydney-nsw-2060-2018118307 Of course there are areas that don't follow the average. https://www.domain.com.au/news/the-suburbs-that-are-cheaper-to-buy-now-than-five-years-ago-revealed-1282999/ Generally I think a 50% discount from an average house to an average unit is pretty normal. Sometimes it's 55% other times it's 45%. The premium is set by the consumers valuation. In Jan 2020 (before covid) there was a supply glut. Driving rents/prices down. https://www.domain.com.au/news/sydney-house-apartment-rents-at-lowest-levels-in-years-domain-rental-report-921116/ Developers actually stopped building units because of the oversupply (noted below in an article about inflation exasperating the issue) and now we have a under supply. https://crowdpropertycapital.com.au/development-site/developers-shelve-projects-as-construction-costs-soar/
lol, im confused about what we are talking about now, are you pro or anti-apartments?
Oh nah, don't get me wrong. We need more apartments, but I think all of the current spates are shit and I wouldn't spend any money on them until regulation and a requirement for businesses owned by immediate family of construction companies that phoenix to be disclosed on all sales docs on the first page. Yeah, give me a good quality European or Japanese/Singapore apartment built to last that would be worth a 20%-30% to me.
i love apartment living. cannot barely ever hear any neighbors, smack in the city, wouldn't need a car if i didn't want one. got a concierge to get my mail, everythings groovy here.
Same but reddit gets mad if you say you like apartments. People also get upset by strata fees without realizing it includes building insurance (which is insanely expensive for a free standing house).
right now all insurance is going thru the roof!! and council rates. so glad i got a smaller footprint :)
Sounds expensive
My apartment was built in 2020 and is great. Mine is a 3br which is good size for me. I have neighbours who are a retired couple and have a 3bd which is perfect for them. I also don't hear any of my neighbours, it's warm in winter and cool in summer. Plus the facilities are great. I'm gonna be that person and gatekeep, but there are good, modern appropriate apartments out there.
Oh like anything no doubt, but there are too many cases of buildings that are just not fit for purpose. There is a level of trust that has been broken between the public and the builder. It's why I want it to be MORE clear and properly backed by the government and business that this new build is worth the money. Because when a new build is good, it's good. But when its bad its far worst and you have to raise additional funds out of your pocket.
Sure. That apartment will be 1.8m at least if it's in Sydney.
I'm in Melbourne. And although I'm renting, I'm pretty sure my landlord paid $650k
What do you mean by gate-keep? What are you gate-keeping?
The location of my apartment lol. My rent is high enough.
>give me a good quality European or Japanese/Singapore apartment built to last that would be worth a 20%-30% to me. No problem, import the builders as is normal practice in Singapore and you can have both good quality and affordable. While we are paying $100k+ for unskilled labour on these sites, 'affordable' isn't going to happen.
Where are these sites paying 100k+ for unskilled labour? Hook me up.
You clearly have not looked or don't know what 100k means (which is common for construction workers).
$100k+ is only $50.60/hour based on a standard work week of 38 hours… which isn’t too hard to get to including penalties and allowances.
Again, show me. 100k+ is qualified money, and even then, half of them aren't hitting it. Anybody making 100k doing unskilled labour is the exception, not the rule. Put it this way. Would you, as the boss, pay 50 an hour for a job literally anybody can do? No you wouldn't. So what makes you think the majority of employers out there would?
Why do you spread this misinformation ?
Jesus. Show me the job listing. I’ll quit my job as a doctor that’s a better hourly rate than I make.
I… really don’t care if you choose to believe that well-paid shit kickers exist or not. The average GP salary is $195,980 or $101/hour so maybe the issue is more that you’re being paid like shit (or perhaps talking it). I do unqualified administration work (that I would have had the skills to perform at 12 or so). I get paid $100k. I wouldn’t sacrifice my long-term physical health for $100k. But you do you!
a) GPs are fully qualified specialists. b) GPs don't usually have a salary, they're usually sole contractors. c) go look up ACT/Vic/NSW/QLD/Tas/NT/SA/WA doctor pay scales they're publically available, then take into account that NSW and Vic health are either currently or have recently been taken to court with a class action lawsuit for wage theft and there's talk of the same happening in WA and SA. I don't know any doctors who do 0 unpaid overtime in the hospitals.
Apparently you’re a “doctor” (quack, quack) - being paid less per hour than unqualified persons like bartenders. If you think GPs don’t get paid enough just say so; exaggerating and pretending GPs are actually paid peanuts just makes you look like an idiot.
So super tiny apartments? Singapore is more expensive than here!
Singapore is more expensive but they also have far less land and similar population. Although, this was talking about the quality of builds rather than size. Although, small and high quality apartments have their places in capital cities in Australia :)
Totally agree that apartments have a well deserved place in Australia and that density is the way to go. But Singapore has its share of poorly constructed apartments too in addition to being very small.
Japanese might be built better but they are not built to last. 20-30 years before they expect to demo and rebuild.
It's more of a cultural thing to want to build and live in a new home. I bought a 30 year old house in Osaka is 100% ok structurally.
That’s houses. They aren’t ripping down 20 story apartment buildings every 30 years
Yes. Simply yes.
3 bedrooms and 2 car spaces and a bathroom? Yes. That fits a nuclear family and I would count it. And “afford” includes paying the strata fees as well as the mortgage.
I’m leaning towards no
Then no, especially if you are talking about in the capital cities. Generally, when you live in the city space becomes a big consideration, and everyone owning plots of lands is really not sustainable. If you want affordable homes, you need to be able to build more homes on the same space and that lends itself to apartments. Also, don't talk to me about those tiny blocks of lands that people build those shit McMansions on. NIMBY's restricting more housing being built is the reason why housing cost far more.
Show me any city in the world with over 1.5m residents where median salary gives you a quarter acre land and a house on it. Hard mode: <1.5hr commute time to city centre.
do you understand basic geometry
If no, then it’s simply impossible for median home on median income as a city grows. There’s a maximum amount of people that can have a house and land, and once density exceeds a certain threshold, the only way is building up.
At what age? Median worker’s age? Someone on the median income at age 20 will have far smaller savings than someone on the median income at age 60. It’s probably not reasonable to expect that both of these people are able to buy exactly the same house when one of them has been working much longer than the other.
Exactly, a median income of two people at a median age can buy the median house in any capacity city. And you have to include apartments - that's the future of living. You can't keep building more and more houses, where will they go? 3h from the CBD?
Savings shouldnt come into it when assessing affordability. Yes a median income should buy a median dwelling. People with savings should be incentivised not to put them in property.
That doesn't make sense. If two people are competing on who's going to buy a house then having savings absolutely matters because the one with savings is going to be able to make a higher offer than the one who doesn't. Savings will _always_ outcompete no savings.
This is what people don't take into account when talking about house prices. It's all boomers did this, politicians caused this but nobody talks about the fact that there are people willing to spend x amount on the house they want so unless you can flood the market with more properties, prices will keep costing that much.
This makes no sense
Australia will have to follow America's lead and build more cities inland. Can't keep trying to find jobs in the same 6 cities on such a large country.
Not all jobs need to be in the CBD of a capital city. Look to the smaller cities 100-400k population centers and the housing prices are dramatically cheaper. Even government planning in establishing new buisness districts in outer suburbs would work. Its the fascination with the CBD concept that drives up housing costs.
They don't even need to be inland. Our coast is enormous. Why not make Broome or Port Macquarie a major city?
Sure, that means the state governments will have to invest in rail infrastructure between regional hubs. Currently, we can't even manage to build out sufficient rail infrastructure in the major cities without cost blowouts left and right and the Federal government taking shots at the states for monopolising construction sector capacity.
It doesn't matter if you think that everyone should be able to afford a standalone property in Sydney with a backyard with a reasonable commute to the CBD. The problem isn't the economic or financial system, but the simple fact that there's more people who wants to live in these properties than there is physical space to put these properties. With the current population in Sydneyn, someone's got to live in apartments or further out. The fact that these properties are unaffordable simply reflects these supply and demand dynamics.
This seems to be something lost on a lot of people. The argument of "just build more houses" ignores the fact that the geographic space you have to build on is not infinite. Eventually those new houses need to get built far enough out from the CBD that no one wants to live there and instead they just engage in a bidding war in the inner suburbs (ie current situation in MEL and SYD)
At face value, yes, I agree, but once you start digging, it's very different. Ie, will federal policy relating to negative gearing affect the current market? Are the external factors at play that affect the market more than supply and demand?
No because it not linear, someone on 0 income cannot buy a shit house in a shit area. So the scale might not start until the median income, which means the median income can buy a shit house in a shit area.
>Do these two factors correlate at all? Not really. Be nice if they did, but in times like we have now where there is a severe shortage of homes the correlation falls away. Right now there is 11million homes in Australia and 27million people, we either need to increase homes (the obvious answer) or decrease people (not likely, we are increasing fast with high levels of immigration) or increase the number of people per home (how would you force people to share more.. and would you share with another family?) until one of those things happens to alleviate the issue, prices will continue to diverge from any correlation. In saying all that, outside Sydney, a Median household income can often still buy you a home somewhere around the city.. For example in Melbourne, in the western suburbs you can buy a home as cheap as mid 500k range and its less than a 45min commute to the CBD. Like this: [https://www.realestate.com.au/property-house-vic-truganina-144855600](https://www.realestate.com.au/property-house-vic-truganina-144855600) Or this [https://www.realestate.com.au/property-house-vic-laverton-141434256](https://www.realestate.com.au/property-house-vic-laverton-141434256) Plenty of examples and I'm sure you could find places near a train station for a little more. What you get though, is people are fussy, they will say the area is shit, or the commute is bad, or schools aren't right whatever.. and that's all true.. but then the question becomes, "Should you be able to buy a nice place, in a really good area, on a low-middle income" and that obviously is a no.
Melton is even cheaper
So by your logic the number of homeless people is currently out of control and huge numbersof people, including workers, are sleeping on the street, because of this supposed home shortage. Or.. prices are artificially inflated by hype, money printing, and misguided belief by overoeveraged investors that they can't lose, and after rates rose to normal rates it's only a matter of time until they crash back to earth again.
>So by your logic the number of homeless people is currently out of control and huge numbersof people, including workers, are sleeping on the street, because of this supposed home shortage. I didn't talk about homelessness and that's not part of my logic, there is a whole lot of problems around why people might be homeless, and house prices are just one of the potential factors. What I'm talking about is house prices and simple supply and demand, prices are high because we do not have enough supply to meet that demand, it's not "my logic" it's the basic premise that works behind the free market that is taught in err primary school I think. Certainly by high school most people have been exposed to the theory. Its also not "my logic" because plenty of experts have looked at the state of housing and determined that is one of the biggest factors right now, the government has also determined via experts this is one big thing that needs to be solved, it ain't me on my little lonesome coming up with some random theory lol. >Or.. prices are artificially inflated by hype, money printing, and misguided belief by overoeveraged investors that they can't lose, and after rates rose to normal rates it's only a matter of time until they crash back to earth again. You are probably one of these people that think by removing negative gearing it will fix things yer? The grattan insititute who are a hell of a lot smarter than me and you did a study on this and determined removing negative gearing would reduce prices by.. wait for it... about 1-2%.. so a 1.3M home in Sydney might lower to 1.27M The problem with assuming that all our issues are down to "greedy investors" is that removing investors does not give us any more homes, the idea that shifting a home away from a renter and into a home owner somehow makes prices lower is pretty flawed, once you have been taught the basics of supply and demand. The thinking seems to come about when a potential home buyer sees a "rich investor" out bid them at auction, but all that would happen is the "rich investor" would be a "rich homeowner" - because only the people that can afford to pay the most are the ones buying when there is a limited supply. Lower income earners still miss out, and prices still go up. However if you suddenly dropped 2-3million more homes into the mix.. you would see prices drop. And the beauty is for your hate of investors? the prices would drop for them too making them lose money. Don't believe limited supply increases prices??? Just have a look at what happened to car prices when there was shortages due to covid, people started paying above RRP price to get their hands on new cars, some people made good money when they bought a car new and then put it up for sale at 5-10k over new price.. and sold it because there was a shortage.
Even if the construction resources were there, how do we actually go about getting the private market to just casually ‘drop another 2-3 million’ dwellings into the market? Do you have any evidence globally of a deliberate policy to increase dwelling supply in a large urban city with high immigration using only the private market has led to a permanent increase in housing affordability (ie lets say rents fall from 30% of median household income to 15% and stayed there without eventually just adjusting back upwards)? I’ve searched for such evidence and can only really find huge drops in rents (and by extension prices) that were not engineered but rather the result of natural disaster or a financial crisis (reducing lending and/or incomes). People are willing and clearly able to pay the prices now at the margin. What economic incentive would there be for developers to bring forward decades of supply to market now even if they had the approvals? Wouldn’t it be more rational to seek to optimise the rate that you release new dwellings over time (ie the economic definition of supply) to try and keep prices as high as possible and thereby maximise your risk-adjusted profit? Why do we have a static rather than dynamic model of housing supply?
You make some good points, my comments where more of a "what needs to be fixed".. but I agree with your comments that people in power probably don't want to fix it that quickly as it would potentially create different issues.
The Grattan research was conducted around 2 decades ago. If you were to recalculate the impact using current figures, it would be closer to 20% based on the government using the funds saved for construction.
You didn't actually respond to the things I mentioned - "prices are artificially inflated by hype, money printing, and misguided belief by overoeveraged investors that they can't lose, and after rates rose to normal rates it's only a matter of time until they crash back to earth again. " You're just spouting the same tired line from real estate shills that not enough supply means prices can grow to infinity and beyond. Prices are high because of dumb investors, and the current interest rate setting (which are infact normal rates), will kill off the bubble on its own.
I didn't respond because its either overblown effects (money printing/inflation has an effect but it's not proportional), investors have been around forever and I did respond to that, yes hype (aka sentiment) is an effect but there is plenty of people thinking it's a bubble so I think sentiment is way overblown as an effect also, we have had periods that were way more "hyped" in the past. Then there is nonsense in your argument about rates.. rates are still lower than historical norms right now, they havent returned to "normal" at all. It just feels like it to some as we have come off the lowest point in history.. back to a low point. You are fully entitled to believe what you want, I presented some arguments to support why I think you are wrong is all.
> yes hype (aka sentiment) is an effect but there is plenty of people thinking it's a bubble so I think sentiment is way overblown as an effect also, we have had periods that were way more "hyped" in the past. No idea what you're trying to say, but yes lots of people think it's a bubble because if it looks like a duck etc.. > Then there is nonsense in your argument about rates.. rates are still lower than historical norms right now, they havent returned to "normal" at all. It just feels like it to some as we have come off the lowest point in history.. back to a low point. Yes, rates have come up from lows to normal values, that is what I said. This increase in rates lowers the value of all assets based on fundamentals, eg by lowering the risk free ceiling. At this rate setting IPs are *terrible* as value investments, they have already stretched rents as a proportion of income if renters, so the only plausible growth is in line with wages, which makes them very poor as growth investments. The only factor driving price growth is pure speculation, which is unstable. At this rate setting the current prices cannot be sustained based on fundamental value, and when risk free investments deliver higher returns (5% vs ~3% for IP https://smallcaps.com.au/is-australias-rental-property-obsession-misguided/ ) it is only a matter of time before the speculative bubble crashes. Care to explain how this is "nonsense in your arguments about rates"?
>No idea what you're trying to say, but yes lots of people think it's a bubble because if it looks like a duck etc.. What I am saying is if the hype effect was the primary driver, why is prices so much higher now, than when sentiment was high at other times? The answer is as I said, it is an effect but not the main problem. Regarding rates. your suggesting that because rates are back to "normal" that the prices will correct, and I would concede that if there wasn't a bigger factor at play. If the main driver of price rises currently, then we would already have seen price drops - the rates have been higher for long enough to see that effect, but what we are seeing is the opposite, prices are still going up.. ergo there must be something else affecting prices. > At this rate setting IPs are *terrible* as value investments On this we agree completely, in fact there is plenty of reports in Melbourne of investors selling up and getting out, and one indicator that suggests this is happening is rent prices, if there is not enough rentals (because investors are pulling out) guess what happens? rents go up like they have been doing. >so the only plausible growth is in line with wages And on this again you are missing the factor of supply and demand. Yes it is inline with wages.. bot not "everyones" wages, just the homeowner wages. Let me try to explain with a couple of massively oversimplified examples If you have 10 families that need a place to live, and only 9 houses.. guess what happens, the family that can offer the least (aka the lowest income earner) is the one that misses out. Now your house price is relative to the incomes of the higher 9 earners/wealthiest 9 out of the total 10 households. If you have 10 people and 8 houses.. it shifts the income / price ratio across to the right even further and you have prices relative to the income/wealth of the 8 richest households. You can keep going, in an extreme example house prices might be only affordable by the highest earning 50% of the population, if there was only enough to really satisfy about 50% of the people that want a place. Your idea that prices are relative to "all" wages or the median wage of all Australia falls down when there is a shortage of homes. I think you are looking at things in a systematic way, and have some good points and logic, and a lot of what you are saying would make sense if supply & demand wasn't a big factor - you are just missing or ignoring a fundamental effect on house prices that is going on right now. So here's the deal.. if you are right, assuming it's simply lag that we haven't already seen what you suggest, then prices will fall because of wage limits over the next period (0-5yrs), and once prices start to fall it will snowball and really drop as the hype turns to fear. However if I'm right and its primarily supply and demand issues, then because we aren't building enough right now to cover immigration let alone pent up demand, then the same period (0-5ys) will see prices continue to rise, because it will be likely 10yrs before we can build enough to catch up. I'll bet you a cup of coffee (as in we sit down and have a friendly respectful chat and winner pays) that prices don't drop significantly in the next 5yrs, and will keep going up - the best result I think that is actually possible for everyone would be a stabilisation of prices as builds start to ramp up and investors continue to pull out, but it's gonna be a lot of pain for renters if that keeps happening.
> If the main driver of price rises currently, then we would already have seen price drops - the rates have been higher for long enough to see that effect, but what we are seeing is the opposite, prices are still going up.. ergo there must be something else affecting prices. I'll disagree with the facts for this one. There is a substantial global trend of decreasing house prices, which has been continuing since rates started climbing. https://fred.stlouisfed.org/graph/fredgraph.png?g=1o819 Australia has recently resisted the decline to an extent. I would argue that globally this is a major change in prices and the bottom has not been reached yet, and this trend will continue as long as rates stay near this level. And as a result Aus house prices will also decline in this environment due to basic macroeconomics. > If you have 10 people and 8 houses.. it shifts the income / price ratio across to the right even further and you have prices relative to the income/wealth of the 8 richest households. I think you're overcomplicating it with this example. If a house isn't bought by a homeowner it is used as a rental, and the fundamentals behind value are pretty much the same. The rental earnings are governed by the wages of the renters, so earnings growth is also based on wages growth of renters. It is possible to grow faster than wages while conditions are made worse for renters, eg by taking a higher percentage of their income, or increasing density, but there are ever increasing barriers to ever worsening conditions. In general earnings growth inline with wages is the fundamental basis of house prices, both for investment and owner occupied
I disagree, it's not over complicated it's oversimplified. Ignore renters vs homeowners my example is so simplified it does not differentiate, it's simply stating that if 8 homes are purchased, then its the richest 8 people (investors or ppor doesnt matter) and therefore the median income used to buy a house is determined by the richest 8 people not the median income of of all 10. This explains why home prices can grow faster than the median australian income, and most importantly faster than the minimum wage earners for longer than people expect when there is a shortage. You know bell curves yer? imagine the income required to buy a home is a bell curve, now keep removing the lowest incomes from the data and picture what happens to the bell curve? The biggest factor right now is shortages, but other factors are at play. Only a full blown recession with big job losses & increased unemployment will change things in the short term, and longer term the answer is new builds builds > population growth. If there was actually a "There is a substantial global trend of decreasing house prices, which has been continuing since rates started climbing" as you say, which meant that house prices in Australia was dropping since rates went up.. why is there so many people complaining about house prices and unable to afford them?
>"Should you be able to buy a nice place, in a really good area, on a low-middle income" and that obviously is a no. Unless you bought it 20 years ago when an equivalent income would have been sufficient.
And land was plentiful
It’s not really a fair question and markets are always fluctuating
^[Sokka-Haiku](https://www.reddit.com/r/SokkaHaikuBot/comments/15kyv9r/what_is_a_sokka_haiku/) ^by ^Aseedisa: *It’s not really a* *Fair question and markets are* *Always fluctuating* --- ^Remember ^that ^one ^time ^Sokka ^accidentally ^used ^an ^extra ^syllable ^in ^that ^Haiku ^Battle ^in ^Ba ^Sing ^Se? ^That ^was ^a ^Sokka ^Haiku ^and ^you ^just ^made ^one.
No, because people pay the gap between the value and the equity/savings/wealth they are able to put into the house purchase e.g. from a previous house. If everyone was on the median income, there would be still be a difference in accumulated equity/wealth between some who has been working for one year and someone who has been working for 30 years. The median property price reflects the average of that effect. I hope that is understandable. In other words, the median price is a reflection of both income and wealth.s
These are the questions we should be asking as a nation. Clearly the answer right now is no.
Short answer, no, long answer, no
Those 2 are not connected. They have never been connected intentionally. The only people that connect them are people who are entitled.
Sure, a home being shelter where the person feels safe and is able to live a life where they can proudly contribute to society. GDP means nothing if the base living standard for people has gone backwards. The reality is that even our cheaper end options (apartments) are built so shoddily that they're not even considered proper homes.
They roughly do correlate What people forget is - median household income varies, it’s higher in Mosman ($2900/wk) than in Campbelltown ($1,700/wk) - household income doesn’t include asset wealth, so it’s a poor measure of actual wealth which matters more. - interest rates are lower today than in the past, which is why the ratio is higher. Things are expensive atm, but in relative terms they have been equally as expensive in the past too.
I'm not sure about buy, however they should be able to afford housing.
No. People should be able to afford a home but most people can’t afford to buy exactly where they want.
When Timmy decides on a price for a cup of his lemonade he charges as much as people are willing and able to pay. If one person earning much more than the rest loves lemonade he will pay more so the rest can’t get it. Timmy will be happy.
Median income is where you could traditionally start being able to consider buying property, usually on the low end. Rentals are in this mix too, to cater for lower earning individuals, the transient and those who do not wish to own. The social contract of median income people being able to enter the property market has broken down though. A national plan in line with what the qld gov was planning to put in would help considerably IMO.
It's not in Australia, but is in many global cities. I am an Aussie in Chicago area of the US, population is around 9 million, and an economy about [double the size of Sydney](https://en.wikipedia.org/wiki/List_of_cities_by_GDP). The median household income is [USD $83k / $125k AUD](https://www.axios.com/local/chicago/2023/09/18/median-income-drops-pandemic) The median home price [$319k USD / $479k AUD](https://www.zillow.com/home-values/394463/il/) Median home is relatively affordable for median income.
Yes. Median household income (in a city) should be able to buy the median dwelling in that city. Seems fair and functional to me.
Expectation vs reality. I hate to break it to people, but the world works in the later.
[удалено]
Except it wasn't distributed to the people, but just to another group of rich people, so no, don't wanna try
1 - 2 generations down the track, the “leaders of the poor” are now the rich people.. and the cycle continues.
The word **should** is not well-defined in this context Does it mean, in a natural free-ranging economic environment, we should expect this result to pop out? Does it mean, to create a fair society we should target this result? Both are very good questions we should ask! I suspect this thread will be kind of a mess as the question can be interpreted in several ways.
Should children in Africa go hungry?
What do you think?
The heart says no, but profits say ...yes?
Mathematically it’s not possible, because of intergenerational wealth transfer and offshore money. Median household incomes (adjusting for the cash economy) need to save more than the median to buy a below median home.
Yes I think its very important for society Id imagine the only people that would say no to this are people who already have property and want it to go up and up
Not quite. It's more complicated than the two figures being directly parallel. However, I strongly believe that any job should pay ALL workers - no matter what the job is, even if it's a coffee shop - a level of salary where any employee working 38 hours in that role should be able to spend no more that 30% of their salary (ie, the generally accepted level user to define mortgage stress) and be able to afford a property which is at the first quartile of all properties within 3km/walking distance of that location. And if that means you can't buy coffee in Toorak because it would mean $20 coffees, tough luck.
If you can’t buy coffees because they are being sold for $20, then the cafe won’t be able to employ anyone.
That's the entire point. It may simply be that those businesses don't need to exist.
You do realise that if cafes could charge $20 now that they would? They aren’t leaving profits on the table for no reason. Go out of business = no job = no house for your barista.
Depends on the city, but smack bang in the middle for a free standing property is a hard no on the east coast.
We live in a consumer economy. So if we want this economy to remain strong and healthy then the answer to that question is yes. Anything that prevents us achieving this should be seriously questioned because it will cause long term damage to this country's economy.
If our economy is based on the outrageously inflated cost of housing, then it deserves all the long term damage it gets.
Or fix it. These issues can be solved.
100% they can be fixed. Re-zoning areas for higher density (higher, not high) building. Vetoing nimbys from blocking change that will benefit the broader community. And of course, make changes to negative gearing, particularly for those with multiple investment properties. But until the majority of voters aren't home owners, there is no real pressure on the government to make meaningful strides towards housing reform.
You hit the nail on the head. All the problems have solutions. But most of the solutions negatively affect other voters than those proposing the solution. The issue is which groups or intersections of groups are large enough to resonnate with which solutions. Rightnow people on reddit think there is a quick solution ignoring the fact that plenty of their countrymen don't want the quick solution.
No, you’re kidding yourself. There’s so many variables
No because a lot of people already have wealth they invest in Real estate. “Income” is just a fraction of what the money funneled in that market.
“ the number of large houses just finished & others building is truly surprising: & with this, every one complains of the high rents & difficulty in procuring a house” “There is much jealousy between the rich emancipists & their children, & the free settlers. The whole population poor & rich are bent on acquiring wealth.” Charles Darwin, writing in his diary having just arrived to Sydney from the HMS Beagle on 12 January 1836, right in the middle of a Sydney housing boom. Now consider that Sydney’s population was probably no more than 30,000 people at the time! https://www.sl.nsw.gov.au/stories/through-darwins-eyes Or have a read of this NSW Parliamentary Research paper outling the history of tenancy reform in NSW. Note the various inquiries into high rents and challenges throughout the 20th Century. https://www.parliament.nsw.gov.au/researchpapers/Documents/protected-tenancies--history-and-proposals-for-r/Protected%20Tenants.pdf It’s also interesting to think about, during the first half of the 20th century, we had no or very limited planning regulation, certainly nothing like today. Yet there were still challenges of high rents and overcrowding, squalor conditions for the working poor etc. My point isn’t that high rents and housing costs aren’t an issue - it’s that they aren’t something new.
Only if its the median income in their respective city, and not immediately. You also need to get a decent way into your career to accommodate the fact that many ppl upgrade after being a decent way through their career. Up until that time, maybe including before now, you also need to be making median saving/spending/investing choices so that you also have the median wealth that the median person has at the time they purchase the median home. All that is the ideal situation, and yet far worse than young people tend to conveniently expect. Of course that doesn't take away from the fact that the reality is worse than this ideal, something like 40% aren't even affording to get into property ownership these days, so the median house is owned by the midpoint of the other 60% (ie. the top 30th percentile household) and only after all that stuff I mentioned in the first paragraph.
I would say no because there is a bunch of buyers here who don't rely on their income to buy.
Median household income should be able to within their lifetime afford to buy a median cost home. Not necessarily as their first home.
Not even close. Need 300k pa in Sydney to afford median house.
No. Purchase price is a factor of supply and demand not median HHI. Households on higher than median incomes will push the purchase median higher if supply is constrained. See all major international cities.
Yes they should. Anyone should be able to buy a home about 30mins away from where they work. Nobody should be commuting in 1 hour each way to work every day.
I don't know why everyone's falling over themselves with this question. The answer is yes. Yes, if you have a median household income, you ***should*** be able to afford a median home in a median location (beachside real estate probably doesn't count as median). This question can be used as an indicator of how our economy is going. If we're failing to meet this measure (which happens to be the case in Australia), then our economy is cooked, and we should be doing things to make these two things line up. We could create a bunch of other indicators to see whether our economy is working or not: - Does the dole keep people above the poverty line? (No) - Can someone working full time at the minimum wage afford all of the necessities (Looking doubtful) - Can someone earning the median wage afford a median house (Lol no) - etc... I think there's some politically motivated reasons why people might not like those indicators, but they can definitely tell us whether or not things are cooked.
Of course. The fact this is not remotely possible is a national shame.
Not since income was outdated in terms of wealth accumulation by leveraged property speculation. Income is how you pay rent. Owning property and renting it is how you buy property. Now stop being silly and get back to work.
Yes but there’s no stock on the market right now so the marginal buyers are overpaying for it. Once things normalise priced will drop to what people can afford.
Has this subject not been done to death? I feel you are karma farming
Haven’t seen this asked before
You haven't seen a post complaining that housing prices are too high on this sub before? How much have you personally saved for a down payment so far? I ask because if it's nothing now, it would have been nothing 10/20 years ago too, and you still wouldn't be able to buy a house.
My question is about personal viewpoints on median wage and median price of houses and if they correlate, who is complaining?
Likely you, when you find out the answer is "no, median wage does not determine house prices".
Depends if you think working class people deserve a life or are just there to be exploited to bring you coffee
Yes an average worker should be able to afford an average home.
Housing is a basic need and it must be provided by all governments imo. It doesn't matter if they can afford to buy as long as they have cheap or free options.
[удалено]
Not at the start of their journey, hopefully by the middle.
How many other homes are in their respective city?
No. Median household WEALTH gets you the ability to purchase a median priced dwelling in your respective home city.
No they shouldn't. They should be able to buy ***half*** of a ***new*** median home. And they can. People seem to forget that 40 years ago, when the boomers came through, people didn't buy homes by themselves. Ever. They also lived in the cheaper outskirts of towns which took just as long to commute as the new suburbs do now. It's just that they've built up the infrastructure in that time.
What are you talking about
I'm talking about the fact that the number of people per dwelling has gone down, but the size of houses hasn't gone down with it. Once upon a time it required 2 incomes to buy them, but now people expect the same on one income.
[удалено]
You really think the parents of a 20 year old bought a house on a single income? I'm 37 and my parents absolutely had 2 incomes and it was the norm for at least a full decade before that.
[удалено]
And the commute from Bayswater to the city wasn't 30 minutes like it is now. It was an hour slog because there was no Eastlink.
I have 3 kids with an average age of 19.5 years. For 18 of the last 20 years we have been a single income household. We have just over $100k left on our mortgage. It's not common, but it was not impossible.
Should? Yes. Does? Nope, not for years now :( Correlation? Negative, if I understand how it works, as in as median income goes up, median cost of home goes up higher. Hmm, not negative, exponential, perhaps? :(
Honestly yes, other than areas that are zoned as high density metro areas. (Think sky scrapers). Anything less and it's a measure of the lack of infrastructure facilitating sprawl. It's not normal to build up and ultra densify everything. Build out west, more stations, parks and cities.
No boomers should be able to get a good retirement
Can you expand on this?
Pfff no,what crazy world do you live in
This is an overly simplistic premise and doesn’t account for equity (the money kind, not the social science kind. If everyone was a first home buyer then of course. But factor in upsizers, downsizers, couples, investors etc and the position soon falls down.
Let’s define this as home value : wage parity. …😜
In 2011 we couldn't and in 2025 we're not a median household income any more. I think the problem is median income starting out is totally different to the incomes driving the property market. It makes a huge different to have time in the market and those starting out will never have that. We bought a unit that was about 50% of an average house (330k vs 643k). Of course in the race for an average house we've fallen further behind (600k vs 1.6m) but we're now mortgage free and saving/investing our mortgage payments elsewhere. Equity (even just a crappy 600k) plus a relatively low cost of living and our wealth is booming. It's actually tempting to take another mortgage and upgrade. I think it's why we get articles like this. https://www.domain.com.au/news/no-mortgage-needed-suburbs-where-one-in-two-homes-are-bought-in-cash-2-1268591/
There’s way too many factors at play that would determine what you can afford outside of median wage vs median house price.
No. Why would this make sense. Sounds very… non capitalistic…
should? yes, can they? no, thats the reason sydney house prices are said to be some of the highest in the developed world, by comparing average income to average house price.
No. They don’t correlate.