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Aussie home ownership dream starts to fade; It looks tough if you use made up numbers
Topic Started: 22 May 2012, 11:06 AM (2,696 Views)
Frank Castle
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Business As Usual

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AUSTRALIANS have long had a love affair with the housing market. The attraction and security of owning a place to call their own has been a driving goal for generations of Australians, but this great housing dream is slowly slipping away for many today. Few people would consider house prices within or near any Australian capital city as being cheap; in fact, most people would consider them to be expensive.

But this hasn't always been the case. Sydneysider Graham Roberts purchased his first house in 1978. It was a three-bedroom terrace in the now trendy suburb of Lewisham, in Sydney's inner west, for $55,000.

He worked as a sales representative earning about $30,000 a year.


http://www.theaustralian.com.au/business/wealth/aussie-home-ownership-dream-starts-to-fade/story-e6frgac6-1226362719451


$55,000 house on $30k a year in 1978 sounds good right?
$55,000 was a 5x average wage year house

$30k was 3x the average wage for that year
http://www.abcdiamond.com/forum/australian-employment/average-wages-in-australia/

3x the average wage now gets you $210k http://www.abs.gov.au/ausstats/abs@.nsf/mf/6302.0/
And $650k can get you similar property in the same area at 3x wage years.



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TED BULLPIT
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This property was less than 2 times his wages.
A terrace here would have been less than 55k in 1978.
Feel free to find a median house price figure for 1978.
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Frank Castle
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TED BULLPIT
22 May 2012, 11:27 AM

A terrace here would have been less than 55k in 1978.
Where would that be exactly?
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TED BULLPIT
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Frank Castle
22 May 2012, 11:28 AM
Where would that be exactly?
Where you thought.
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genX
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Quote:
 
$55,000 was a 5x average wage year house

Yes, average wages were 215 per week in 1978 or 11,180 per year.
Quote:
 
3x the average wage now gets you $210k http://www.abs.gov.au/ausstats/abs@.nsf/mf/6302.0/
And $650k can get you similar property in the same area at 3x wage years.

So for 9x the average wage, you can now buy a 3 bedroom terrace in Lewisham for 650k, except of course that there are no 3 bedroom terraces available in Lewisham for $650k, you would need to pay at least 750k for a 3 bedroom terrace in Lewisham. For 620k you would get a 2 bedroom terrace in Petersham.
So at 750k, a three bedroom terrace in Lewisham would only be 10.7x the average wage, but Graham Roberts (from the article) only paid 5x the average wage for his property in 1978. Sounds like Graham Roberts got a bargain while it was still cheap.

So property in Sydney now really is more than 9 times the average wage. Good catch Frank.
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Doubtful
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Frank Castle
22 May 2012, 11:06 AM
Quote:
 
AUSTRALIANS have long had a love affair with the housing market. The attraction and security of owning a place to call their own has been a driving goal for generations of Australians, but this great housing dream is slowly slipping away for many today. Few people would consider house prices within or near any Australian capital city as being cheap; in fact, most people would consider them to be expensive.

But this hasn't always been the case. Sydneysider Graham Roberts purchased his first house in 1978. It was a three-bedroom terrace in the now trendy suburb of Lewisham, in Sydney's inner west, for $55,000.

He worked as a sales representative earning about $30,000 a year.


http://www.theaustralian.com.au/business/wealth/aussie-home-ownership-dream-starts-to-fade/story-e6frgac6-1226362719451


$55,000 house on $30k a year in 1978 sounds good right?
$55,000 was a 5x average wage year house

$30k was 3x the average wage for that year
http://www.abcdiamond.com/forum/australian-employment/average-wages-in-australia/

3x the average wage now gets you $210k http://www.abs.gov.au/ausstats/abs@.nsf/mf/6302.0/
And $650k can get you similar property in the same area at 3x wage years.



So people who earn multiples of the standard wage can afford houses in the past and now.

Outstanding work.

Quick question - what % of the population earned 3x standard wage in 1978 vs now? If that percentage is consistent over time then i get your point. If not then the situation has changed over time.

Would also question your "can now buy for 650k"....I search lewisham 3 bedroom of any type under 1m in lewisham - 1 result returned at $750k....on railway terrace (right next to the rail line!)

http://www.domain.com.au/Search/buy/Property/Types/House/Townhouse/State/NSW/Area/Inner-West/Region/Sydney-Region/Suburb/Lewisham/?bedrooms=3%2c3.5%2c4%2c4.5%2c%3e5&from=400000&to=1000000&searchterm=lewisham&displmap=0

So i earn three times wages now but cant afford in the same suburb - kind of suggest there has been a decrease in affordability (in that suburb for that income bracket)

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TED BULLPIT
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Some good posts there boys and great thread Mr Castle. You were right Mr Castle it does look tuff with made up numbers but even tougher will the realistic numbers. Thanks for pointing this out to everyone .
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Frank Castle
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genX
22 May 2012, 12:39 PM
except of course that there are no 3 bedroom terraces available in Lewisham for $650k, you would need to pay at least 750k for a 3 bedroom terrace in Lewisham. For 620k you would get a 2 bedroom terrace in Petersham.


You pay asking price?
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Edited by Frank Castle, 22 May 2012, 01:04 PM.
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TED BULLPIT
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Frank Castle
22 May 2012, 01:04 PM


You pay asking price?
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Maybe you can explain to him how you get discounted property buy buying into a river bed on a dry week Mr Castle, just tell him to bring his flippers and snorkel , right.
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Pig Iron
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Bogan scum

the interest rate was almost 10% in 1978. I like how they neglected to factor that into the equation.
lets compare the size of the average house and it's kitchen and bathroom in 1978, i'm betting most people now would refuse to live in it.
lets compare apples for apples people, housing hasn't exploded in relative cost, just peoples expectations have.
I am the love child of Tony Abbott and Pauline Hanson
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