Cant afford a house: Consequences/bad luck?

This. Prices are high... because demand is high... because there are more buyers than ever that can afford to pay those prices.

If anything, rising prices is a sign that affordability has increased?

If the clearance rates were shockingly low (<50%) and properties went unsold for months on end, THEN we have an affordability problem.

 

Guest Got a graph showing the price to income ratio over the decades you're talking about?
I've got this one but only shows 11 years. And not exactly showing an 'extraordinary rise' in the ratio.



Why is saving a deposit more difficult? Is it because we're only saving 20% of disposable income? Seems like we have a lot more disposable income than any year previous in the last 40 so shouldn't be too difficult

 

Don't say its expensive. Say you can't afford it.

 

I'm sure you are familiar with Google, but here you go as an example:

 

I see it two ways too

When comparing house to income ratios.
They probably have gone up significantly over the yeara.

But the cost of living has changed greatly
Some things have gone up while some have gone down.

20 years ago you had a phone line into the house and a free to air tv

Now you have a mobile per person and a tablet and foxtel (luxury ) and internet

You could live like a hermit but we can all agree a mobile phone and interent is pretty much a necessity

I too get annoyed when people start saying the house they are looking at is too old or doesnt have a big block......

Nothing wrong with a 1 or 2 bdr apartmebt thats not 100 yrs old for a young couple

Hell you cold live in a bdr with 2 kids until the kids get a bit older.

 

Not really, I'm more a Bing kinda guy.

So it's up 50% in 20 years. Still wouldn't class that as an extraordinary rise. Especially given the population has increased by 7 million since '91. All that demand invariably helps to pushe prices up. Wait until 2050, the Brisbane median will be $36m and wages will be $910k pa. Now that's unaffordable.

Anyway, I'd be far more interested in a price to savings ratio, income is pretty irrelevant if you're spending every cent.

 

It really depends on how much income you have. If you're a low income earner/family it's tougher than ever in Australia to own a home. It's honestly not surprising that people on this forum think housing is affordable because for us it is, which gives us confirmation bias.
The high earners who think they are battlers

 

I don't think class has anything to do with how much money you earn, it's bred into the person. I know a few millionaires who refer to themselves as lower to middle class because of how and where they were brought up.

I'm pretty sure the significant amount of people on this forum struggled to save/repay their first PPOR or IP like everyone else. One was even homeless and jobless for a while. From what I've seen and read, they're not the usual "I can't afford this" but more the "how can I afford this?" And I'd go so far as to say they're even more grateful because they've reaped the rewards of their struggles and effort

 

True. Before I was a home owner, I was jealous of people who were given a home to own because they simply have rich parents.

But I've had to work for my money and I made sound choices with it to build my asset base. This just makes whatever I own that much sweeter. I know how I can do it and this knowledge stays with me, I own it, and that's something I mightn't had gotten with a gifted home.
Of course, if someone wants to give me a home or two, i'll gratefully accept... I might be able to turn that into something even bigger.

 

Having the right mindset or working hard to buy in a difficult price environment does nothing to avoid the fact that buying a home is far more expensive today than for past generations.

You know we build more homes as we go right?

The chart doesn't reach 2016 which would show a leg higher over the last few years to record highs.

Each to their own, but I'd consider a 50% increase in the price to income ratio substantial and the 150% we've seen since the 80s as extraordinary.

 

I think it's just higher expectations. People wanting to buy their forever home first up. The majority of those in their 20s and 30s haven't seen their parents struggle and have been taught to go for what you want. They start adulting and when they can't afford the perfect house it's not fair.

I have a cousin about to be married lamenting that they'll never buy cos the average house in the suburb they want is over 1.5mil. I have a friend with ample borrowing capacity to buy a low end house out my way but how dare they have to resort to living in a weatherboard home.

My first place was an ex housing commission townhouse in outer western Sydney. That's all I could afford at the time. In today's dollars that same townhouse is affordable for both people I've mentioned above. But would they live there? Hell no.

 

But how will they afford the iPhone 11?

 

Credit Card # 6. Its free money I hear.

 

Wouldn't the test be whether homeowner rates are decreasing?

 

i get what you are sayingm

I also hear/see of young people manage to get their parents to chip in or help out and buy their first pppor for $800k,
and im scratching my head thinking, ok if fhob are buying these, who the hell is buying below the median

that being said, for a rich person, mummy and daddy buying them a first house for $800k is normal,
so its what is normal to them I guess

 

Here is what an entry priced 2 bedroom unit looks like: 10//4 - 6 Croydon Road Keswick SA 5035 - Unit for Sale #123722854 - realestate.com.au

For those who can't be bothered clicking... 3km from the city. Advertised at $169k (auction), though may go for a bit more.

 

Omg. You can buy 3 of those for less than the price of a typical 1 bedder in inner Sydney.

 

That's the whole point.... believe it or not, there is an entire country beyond Sydney that is both very liveable & very affordable.

But shhhh.... don't tell too many of them 'cause they might leave & be able to live happily ever after....

 

It's called supply and demand. Just because you may not like the situation doesn't change the reality. People want to live where they want to live creating the demand and supply is low. When SA has the demand of Sydney then you'll see prices rise accordingly. You're hitting your head against the wall trying to figure out why 2+2 =4. Carry on.

 

@Leo2413, some in this thread seem unable to comprehend (or prepared to admit) the fact that housing is less affordable now than for past generations. No one is saying there aren't reasons for that.

Of course it's supply and demand. Though much of those factors are government policy driven, which is why you see people calling for policy changes.

Who's to Blame for Australia's Expensive Property?