BTW that "boonies" suburb was Sunnybank which I think is now classified as "inner south".
Exactly. That 'outer' suburb of the '70s is now an 'inner' suburb. Do the maths again comparing apples with apples and it doesn't look nearly so expensive.
The ratio is NOT far less than what I originally claimed. I said Sydney has been traditionally 3-5 times the average wage, now I will agree that it was 6, in 1991-1993, before that, it was far less. Ie, Far less for boomers.
Just for the record, here is your original claim again:
themoops
House prices in Sydney were, up until about 1998 or so before the boom, about 3-5 times the average wage, now they are about 9 times. 9 times is a lot more than 3-5 times. Get it?
This statement was proven to be wrong, on every point - and I think you have even begrudgingly acknowledged that with this latest post.
Prior to early 90s, all the way back to the 60s, all the evidence I have presented suggests the price ratio was more like 4.5-5 x wages at the low points, and often it was more - certainly never 3 times or even anywhere close. Check out 1989 stats if you dare......how does 8 sound for the price/income ratio then? Just as bad as today right? Is that even close to "3-5 times"??? And this was all 20 - 50 years ago, in very different economic times with high interest rates (double todays average), credit rationing, 10%+ unemployment rates, before the trend of many more women going to uni and the rise of the dual income household, and so on. So I reckon you are drawing a very long bow in claiming that even prior to the early 90s that "3-5 times was the norm".
As for Sydney being 30% over-valued, the only way it would ever correct that much would be if our environment returned to something like the 70s/80s - ie double the interest rates we have now, credit rationing, re-regulated financial sector, chronic unemployment etc. So do you think this is really going to happen anytime soon? I don't - in fact interest rates are heading down right now, not up! If I see a bunch of these factors occurring then I will be the first to turn bearish on Sydney real estate prices.
EDIT: Here's the 90s article I have with Sydney median prices back to 1969:
I note that in the early 70s the Sydney median house price was $20k-$25k, so your parents bought a house for half the median price, if the price you stated is correct.
The typical Australian worker does not earn $70k pa. It's probably closer to $50k.
For years I have been struck again and again by the divergence between the official average earnings and the actual anecdotal evidence I see on the ground.
Just for the record, here is your original claim again:
This statement was proven to be wrong, on every point - and I think you have even begrudgingly acknowledged that with this latest post.
Prior to early 90s, all the way back to the 60s, all the evidence I have presented suggests the price ratio was more like 4.5-5 x wages at the low points, and often it was more - certainly never 3 times or even anywhere close. Check out 1989 stats if you dare......how does 8 sound for the price/income ratio then? Just as bad as today right? Is that even close to "3-5 times"??? And this was all 20 - 50 years ago, in very different economic times with high interest rates (double todays average), credit rationing, 10%+ unemployment rates, before the trend of many more women going to uni and the rise of the dual income household, and so on. So I reckon you are drawing a very long bow in claiming that even prior to the early 90s that "3-5 times was the norm".
As for Sydney being 30% over-valued, the only way it would ever correct that much would be if our environment returned to something like the 70s/80s - ie double the interest rates we have now, credit rationing, re-regulated financial sector, chronic unemployment etc. So do you think this is really going to happen anytime soon? I don't - in fact interest rates are heading down right now, not up! If I see a bunch of these factors occurring then I will be the first to turn bearish on Sydney real estate prices.
EDIT: Here's the 90s article I have with Sydney median prices back to 1969:
I note that in the early 70s the Sydney median house price was $20k-$25k, so your parents bought a house for half the median price, if the price you stated is correct.
Initially I said 9 times but then after some research I revised it to 8.57 times. Yet you exclaim that I was way off?
Initially I said in the past house prices in Sydney were 3-5 times, then you said in the 90s it was the same as now, around 8-9 times, after some research we came to the conclusion that it was 6 times, in the 90s. Yet you're trying to make out I made wild claims and they were and are not.
Hmmmm, looks as though 1989 was a short lived boom on top of a boom, maybe Sydney's boom started in the 80s and it'll crash down to 3 times average wage?
With all the global instability it wouldn't surprise me if this occurred, seeing as we don't manufacture shit and as far as I know we import more food than we export. You've also got Brazil ramping up their mining operations which will compete with ours.
It's interesting to know those figures. Do you keep a whole bunch of old newspapers at home? Yes it looks as though my parents bought pretty cheap. It was on the northern beaches so I guess it was considered out in the sticks back then. Still is really.
My mum left school at 15 and worked as a secretary, so that would probably be $30-$40k in today's money, not much, so the average wage would have been about $5-$6 back then, making the average house prices 4-5 times.
6 times compared with 9 times is a shit load of money, it's $300k. Plus interest.
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
Initially I said 9 times but then after some research I revised it to 8.57 times. Yet you exclaim that I was way off?
Initially I said in the past house prices in Sydney were 3-5 times, then you said in the 90s it was the same as now, around 8-9 times, after some research we came to the conclusion that it was 6 times, in the 90s. Yet you're trying to make out I made wild claims and they were and are not.
Hmmmm, looks as though 1989 was a short lived boom on top of a boom, maybe Sydney's boom started in the 80s and it'll crash down to 3 times average wage?
........
6 times compared with 9 times is a shit load of money, it's $300k. Plus interest.
This got me interested, so I plotted the Sydney median house price from 1969 to 1994 against the ABS average OTE wage data for each year (I used the August number in each case). Here's what we get:
So the 6 times ratio in 1991 was actually the low point of that whole cycle - it was 7 times within 3 years, and was 8 times a couple of years earlier. I will continue to re-iterate the point that interest rates through the whole period on this chart were double on average what they have been for the past decade.
I really see no reason why Sydney price would EVER return to 3 times average income. They have never been there in nearly 50 years, and there were some horrendously shitty economic times during that period. I stand by my outlook as described in my previous post.
That's a very interesting graph. Thanks for taking the time to plot it. you can see very clearly the effect of the drop in interest rates around late 1989 as the inflation tiger got tamed.
I suspect if you used "average household income" you'd tilt the graph down towards the right somewhat, because of the huge increase in the workforce participation rate between 1970 and 1995.
So No lies from me - I am just stating the actual, up to date, correct, verifiable facts:
Quote:
LATEST ABS wage data: Average Australia full time wage; $69k ($1 330.20 / week - not even including bonuses and overtime) ( (http://www.abs.gov.au/ausstats/abs@.nsf/mf/6302.0). In fact if you look at the state data NSW is slightly higher than that again. I am sure Sydney is a bit higher that NSW average even as well.
Those are estimates, not facts. Do you understand the difference?
Quote:
There are 2M plus people working in Sydney, so if the average full time wage is $70k , then sure 1M might earn less than that - but another million earn more, many significantly more. That's why it's called an AVERAGE figure.
Which is why it is less dishonest to use the median, which you did for your house price reference:
They have never been there in nearly 50 years, and there were some horrendously shitty economic times during that period. I stand by my outlook as described in my previous post.
Well they clearly have in a lot of areas in Sydney given my parents example, it's a big place, and it's hard to get an accurate picture based just on averages and medians.
Sure the inner ring will never be 3 times, but it wouldn't surprise me if the outer ring became like this again.
Did you see 9 news last night? They had a story about some off the plan apartment sales in China Town, 99% of the buyers were Asian, it was an absolute shambles and free for all like the Boxing Day sales. It doesn't seem suspect to you that Rudd had to loosen up the FIRB laws to prevent prices from going down?
10,000 were buyers that needed FIRB approval in 2010-11, this would very much help to give an appearance of stability in the housing market.
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
Those are estimates, not facts. Do you understand the difference?
What are you on about? Do you have a better data source for average wages in Australia than the ABS series? They are measured data based on survey / sample - ie real statistically determined data, not simply estimates. How else do you think average wage data can be determined?
Quote:
You are cherry picking to suit your story, also known as lying. You really have learned the Boomer way to get ahead, congratulations.
No - it is "standard" practice when discussing house price to income ratios to use the median house price and the average wage. The main reason is likely to be simply that there is not really any median wage data available. Regardless, I am cherry picking nothing, I am using the typical / standard data sources for calculating these ratios.
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