This Housing Downturn is Over

There is probably a million reasons why home owners have increased in age.

One could be the age of commencing work has increased. For example:

1. Both of my parents were pulled out of school at the age of seven and worked my grandparents' farms as cheap (child) labour. That wasn't uncommon at that time.
2. Most of the people I know from my generation left school at the end of grade 10 (around 15 years old) to start work.
3. Most of people I know from my kids' generation went to TAFE/Uni and didn't start work until they were 20+

I would have thought that if you start work later in life, there is every chance you might not be able to buy a property until later in life.

Just a thought?

Do we really want to go back to my parents' days. Not me - my in-laws first home had a dirt floor.

All we can do is either take action in the present (no-one knows the future) or sit on the sidelines. Every generation has had some who took action AND others who sat on the sidelines.

I know what I am doing and it is NOT sitting on the sidelines. the view is a lot better on the merry-go-round.

I know people have come more fussy (none of us would want to live in a home had a dirt floor) and I don't understand why later generations complain about easy earlier generations had things.

One can only play this game in the present. We can't go back to the past (even if we wanted to) and no one knows the future (although some make out that they do).

 

A whole stack of people including me, the wife, their grandparents, our grandkids, ...

Totally agree. In case you didn't know, it has been that way for generations on generations.

Some people get on with life, no matter what curve balls come their way; some don't.

Yeah, a lot of **** is going on. Unemployment is going up, interest rates are going down, the drought is getting worse (by the minute), Trump is USA president, property prices are going up (in some places), Boris is UK prime minister, more people are overweigh, cancer rates are increasing, our education standards are falling, ...

In the past, we had WW1, WW2, GFC, ...

Some people will sit on the sidelines; others will get on with life. I am in the second category and so are my kids.

That is all I am saying.

 

Agreed that home ownership rates have slightly come down in 25-34 age group between 1961 and 2011 from 60% to 47% - but looking at that data in isolation is the basis of that single dimensional view I mentioned in my original post.

Let's look at the 'perspective' using the same graph from the link:

In 1961, the home ownership rate amongst the 35-44 age group was 72% vs 64% in 2011.
In 1961, the home ownership rate amongst the 45-54 age group was 75% vs 73% in 2011.
In 1961, the home ownership rate amongst the 55-64 age group was 78% vs 79% in 2011.

So, the difference starts petering out as the age group increases and it is almost similar for 45-54 age group in both 1961 and 2011 and then it starts increasing in 2011 vs 1961 as we head to the 55-64 age group.

Now consider the demographic changes since then:

In 1961 the average male lived for 67 years vs 82 years now, the number of Australians enrolled in a degree (tertiary degree) was around 80,000 (less than 1% of population) vs over 1.1m in 2006 (5%) , the average age people got married was 25 (median age of bride) vs 31 in 2011, people (largely males) joined workforce a lot earlier in 1961 vs 2011, didn't go for degrees in 1961 vs 2011 delaying their income start in 2011 vs 1961, got married earlier, had kids earlier, retired earlier and died earlier. You see the trend and the perspective now?

As the economy moves from predominantly manual in 1961 (factory production, farming, clerk) to services based 2011 (banks, insurance, strategy, design, management), the requirements for higher education increased proportionately, pushing more people to study longer and entering the workforce later and thereby buying (or being in a position to buy) a home later. That will explain the anomaly in that age group to a greater degree.

So, when one considers all of those data sets together, it is not surprising that as a more older population seeking tertiary qualifications before starting to produce income, marrying later and having kids later and then living longer, traveling more and (aiming to) retiring later, they start getting the means (income) and desire (marriage/ kids) to own a home significantly later in 2011 vs 1961 and that shifts by a significant margin and that change manifests itself in comparable home ownership as one starts comparing the ownership in slightly older age group.


Deaths in Australia, Life expectancy - Australian Institute of Health and Welfare

Stats show how far we’ve come in 50 years

1301.0 - Year Book Australia, 2012

 

How dare you spoil a good story with facts !!!

There will be some on PC still hanging on the idea that property prices have increased faster than wages is the REAL reason .

At the end of the day, who cares.

it is what it is. Either get on with making a success of one’s life or sit on the sidelines.

 

Contrary to popular belief on this forum, it is possible to both:

• Get on with things / be successful; AND
  
• Believe that housing is less affordable than in the past, with a hope and aim to maintain our quality of life / improve housing affordability (via government policy) for current and future generations.

They are not mutually exclusive.

In fact I would have thought those with kids / grand kids would be predisposed to want the best for their offspring.

I don't have any kids, so maybe if I have them I will turn into a grinch that wants them to work even harder than I did for the same quality of life, as long as my property portfolio is rising

 

I don’t know where you got that idea from.

Most people I know on PC believe that one must get on with things to be successful AND property has always been unaffordable.

Good luck with wanting governments and their policies to make housing more affordable. In my experience, most (probably every) time governments intervene in any market, they make things worse/stuff it up.

I for one, certainly do. I believe most parents/grandparents do.

When my kids were 6 months and 18 months old, we bought them shares in Westfield Trust using their Child Endowment money. Every time we got a payment, we banked it until it was economical to buy another parcel. They still own those shares today plus others they have invested in.

My kids are doing a similar thing for our grandkids, ranging in age from 1 to 5 years. Birthday money goes into buying Wesfarmers shares.

We don’t buy our grandkids silly toys for birthdays and Christmas. We invest in giving them a life skill, currently all three are learning out to swim. A toy might last them 6 months whereas they will enjoy swimming for their whole life.

Yep, we want the best for our kids and grandkids. Not rubbish toys, not rubbish values, not rubbish ideas, ...

That explains a lot .

When I was young, I had an educated Aunty (childless at the time) who was very critical of how Mum and Dad (farmers) were bringing us up. Years later, she had one child and, boy, did she make a mess of being a parent. It is a lot harder than one thinks.

 

I'm not sure what you mean "every time" when there isn't really any time they aren't intervening with regulation on all angles.

See: This Housing Downturn is Over
Or as I wrote a few years ago: Who's to Blame for Australia's Expensive Property? | 2340

Most of the policy changes required to improve housing affordability get shot down on these forums, because it works against the financial interest of those who want prices to rise.

FWIW I was not criticising your parenting.

One can have the view that housing has never been easy to buy, that it takes sacrifice to get into the market; AND, acknowledge that the data shows it is more difficult to buy today (like for like).

 

With such successes as:

• The Recession We Had To Have
• Pink Batts
• 2017/18 Credit Crunch

to name a few, the last thing I would be wishing for is “intervening with regulation on all angles”.

... and they get shot down because they works against the financial interest of society.

Could have fooled me.

Anyway, I will take you at your words. Keep reading, you might learn something .

... AND, if one stay on the sidelines, one will achieve what one deserve .

Even if one takes action, success is NOT guaranteed (unfortunately).

 

People see $ signs and don't want things to change, even if it is to the detriment of their kids or future generations.

People may believe that constantly rising house prices (and in particular faster than wages) are in society's best financial interest, but that's another debate on it's own.

And the financial interest of society isn't the primary interest that housing is there to fulfill.

That is already what the market experiences as the links describe. Changes to those rules don't necessarily mean more regulation, they just mean regulation with different incentives and outcomes.

 

Sigh....

If only I could bottle and package common sense for sale... I'd be wealthier than a Midas dripping gold...

 

Unfortunately, common sense ain’t that common .

I sometimes feel there are more unicorns on this planet than people with common sense .

 

After what I experienced in the parents room today, your bloody spot on mate.

 

Yeah, I read that post/rant.

Hopefully you concur with my solution .

 

Your solution is....( Mouth glued shut. )

 

Please write this, it would be a best seller... in the comedy section

Title: Sackie's comment cents

Contents

1. Why I deserve a quiet parent room
2. Why society doesn't deserve affordable housing
3. ...

 

What would be the simplest way of buying shares with the kids monetary gifts?

 

What an awesome result for the investor; example of perfect timing

Stanmore house makes $400,000 gain in seven months at auction

 

For our kids, we did it via our (human) broker, with us as trustee.

My son does it for our two granddaughters. I believe he does it via two portfolios (one for each granddaughter) on his CMC account.

Do you want me to double-check?

 

Amazing timing...in terms of market price changes, this certainly isn't a one-off anomaly.

I think one of the first posts on this thread I noted that aspirational middle class Sydney (1-2mill) will go gangbusters first (not Western suburbs which will likely do well in 2020 as growth spreads and people get pushed out further again).

This is largely because the local economy has been going through a massive employment & population boom in 2017-2019, and there was no corresponding demand rises for property because of fear/credit/timing. Sydney unemployment begun with a 3 not too long ago, and prices were down 15%. Actual number of jobs created was at record highs too.

Now that everyone is confident in prices again, the backlog of people with good jobs vying for limited stock is high. Its the high demand areas (that are always relatively high) getting bidded up.

Pretty much across the board in the inner rings, the $1-3mill market, is up a solid 20-25% from Jan19 to Jan20.

It's a complete 360 reversal of this time last year, where it was crickets at auctions and it felt like most auctions in this region had no bidders at all. Now at many auctions there's 5 buyers per property again and a big demand/supply imbalance. Most buyers are actually paying the highest price ever for inner Sydney property on transactions that occurred in November & December (probably 5-10% above peaks). There has been a very noticeable price shift in these months. The Corelogic index is going to continue at a rocking pace in Jan/Feb & will likely post ~1.5-2%+ MoM growth to reflect this on the ground behaviour. The actual index, by mid next year, it'll probably be a few percentage points higher than it's ever been, reflecting what buyers are paying on the ground now in large swathes of Sydney.

 

6333.0 - Characteristics of Employment, Australia, August 2019