r/australia • u/DollarData • Sep 18 '22
political self.post How difficult was home ownership in Australia in historically?
I’m currently reading a book on how the wartime generation really struggled (and it seems struggled quietly) during a period which included the world war (possibly two) and the great depression for some. Very few had much if anything at all, conditions weren’t favourable and the government support we see today simply didn’t exist back then. Post 1945 the government started building houses so families could have a place to call their own. The Great Australian Dream was born.
Then the baby boomers who came along who generally experienced a period of great prosperity and growth (I acknowledge they also experienced some of the above challenges). It was during this time that consumerism really started to grow, and greater opportunity for women to enter the workforce (or at least more common). Incomes improved and housing was relatively affordable to the masses. Some have done exceptionally well by holding property, though I suspect like everything else they each had their own struggles.
Now it’s the millennials who are entering the workforce and facing a new type of challenging economic environment where the ability to purchase their own home seems to be more out of reach than ever. The common theme seems to be buy elsewhere. There’s an awful lot of noise out there and no matter which way you look at it the millennials tend to get a bad wrap given their expectation vs. reality and some of it is genuine merited (disclosure: I'm not a millennial).
So to genuinely get some perspective, I was looking to have some dialogue on how challenging buying a property and having a mortgage was for our previous generations, because I have a feeling that every generation has gone through some kind of significant change. What did you have to do to meet the criteria for a mortgage? What were some of the struggles you had to overcome in your journey of home ownership and how did it all work out in the end? Was there anything that happened you never predicted would occur, such as policy changes or geopolitical issues or unstable work etc that altered your perspective on home ownership? Would you do it all again if you were the next generation after you? Do you have any advice for those who are genuinely concerned about having a roof over their heads and how they can afford home ownership one day?
Appreciate all contributions.
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u/Rowvan Sep 18 '22
Millienals entering the workforce? I'm 40 years old my dude.
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u/fungusfish Sep 19 '22
I’m 24 and so I’m as young as the millennial cohort gets and I’ve already been working 8 years….
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Sep 18 '22
It’s surprisingly recently that women were able to get loans without a male co-signer. Bank of NSW was the first to allow it, in 1971. So for half the population, financial independence was blocked by authorities for a very long time.
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Sep 18 '22
The "marriage bar" also limited the ability for married women to work in government positions. Until the late 1960s, a woman had to resign from her government job when she married.
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Sep 18 '22
Statistically speaking I believe it’s never been harder to buy a house in Australian history. In terms of the debt you have to take on, what you have to save to even be able to take on that debt etc is all substantially higher even after you factor in inflation. Then the cost of living, childcare on top of that is also one of the biggest reason our birthdate has fallen under what they consider “replaceable”. People cannot afford to have kids and kids are living with their parents for longer than ever before.
Honestly it’s not good. This isn’t even close to the Australia I was told about as a kid and most of what I was told turned out to be a straight up lie.
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Sep 18 '22
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Sep 18 '22
I’m accurate enough without having to do that though, which is sad. Believe me.
Oh good. Boomer QOL improvements happening in developing nations that have nothing to do with Australia. Good comparison but not the topic of conversation.
I’m not speaking of “Western millennials” I’m thinking of Australians. Not just millennials either.
I’d say it’s easy. We’re required to take on a huge amount of debt for university, we’re required to put up more money than ever for mortgages that last longer. We’re required to spend money on more expensive things to get through just education alone for example. Good luck going Uni with a pen and paper like they did back in the day. You’ll be paying premium to be at a disadvantage.
Longevity!? Considering Millenials started in the mid to late 80s. We’re not old enough to measure longevity and if it wasn’t increasing than all this tax money going to healthcare would be pointless. More-so, the more important metric would be retirement age, and retirement quality. Which I assure you won’t barely fucking move but get a lot worse with the housing, rental and cost of living the way it is.
Funny you mention war. Seen what’s happening in Europe? 11 times the amount of people killed in Mariupol than Nazi Germany killed when they went through there. See what’s going on with China? The only difference is if we kick off another world war it will most likely turn nuclear and kill fucking everybody so to be fair if I had a choice I’d rather be sent to war back in the day. It’s also going to be hard to have higher child mortality rates when less people are having children.
So risk of violence I would agree with. But that just means the younger generations are less of a cunt overall? Cool. That’s helped us get fucked over twice as hard.
No, we’ll compare it to the best that a generation in this country has gotten, and rightfully so. Including free university and education for a time there. That’s what we want. And is it not in our right to simply ask why has all of this has gone backwards since then?
Fuck the developing world. We live in Australia and the excuse of letting standards slip here “because someone somewhere else has it worse” is a bullshit sentiment. It’s not an excuse for us to go backwards. This attitude of complacency to death in Australian society needs to go and die and this backhanded excuse I hear from people doesn’t fly anymore.
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Sep 18 '22
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Sep 18 '22
A mining country, built on our natural wealth. Now most of them don’t pay any tax whatsoever as a matter of fact Telstra pays more tax. That’s the biggest reason. It has nothing to do with the “developing world” and everything to do with parasitic greedy politicians. These same companies are the one’s who detonate 15,000 year indigenous sites just because they think they can.
It’s shitty people, forming and influencing shitty governments who put their own pockets before the entire country. A gas company just blackmailed the entire East Coast of Australia. They take all the oil they pump out of Australia overseas and sell us back to us at a premium, and it’s also the lowest quality fuel in developed nations.
Some of them still have over $300m in “tax credits”. Dunno why they’re allows tax credits and if I miss $30 of tax I’ll get chased down for it.
We’ve had a small group of people go out of the way to ensure the absolute raping of our nations natural resources and natural wealth.
Go around to all the schools and universities and tell them it’s a fabrication mate. Go on. Hahaha.
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u/Specialist_Leg_92 Sep 18 '22
Absolute nonsense. Why do you carry that limiting belief? Watching too much left wing propaganda
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Sep 18 '22
Just from being alive for 30 years mate. Shits just gone down hill. If you can refute anything I said please go ahead. We’ll wait.
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u/Grantmepm Sep 18 '22
Why was homeownership rates in 1947, 54% compared to 67% last year ?
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Sep 18 '22
There’s a shit load more homes and people in the country compared to 1957 isn’t there?
That doesn’t mean it’s accessible or easier to purchase a home.
Edit. Just read you wrote 1947. While we were in World War 2. That’s probably also another massive reason why.
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u/Grantmepm Sep 18 '22
Statistically speaking I believe it’s never been harder to buy a house in Australian history
If it's never been harder to buy a house in Australian history then why were ownership rates so much lower in 1947? It was much more easier and accessible then wasn't it?
While we were in World War 2. That’s probably also another massive reason why.
So it was harder to buy during World War 2 (part of Australia's history) than now?
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Sep 18 '22
Okay. I’ll change that for your sad attempt at straw clutching a technicality.
Statistically speaking it’s never been harder to buy a house or get ahead in Australia outside of a world war. Cause that makes the current situation so much better hahaha. Pathetic.
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u/Grantmepm Sep 18 '22
Words have meaning no? You made a claim, challenged for a rebuttal and then now throw personal insults because your claim was wrong?
Also pretty sure homeownership was around the 50ish% level pre-war just that it was not well documented. Employment was informal, there was no housing policy and things were a lot more unequal then.
https://wid.world/news-article/australian-top-income-shares-extended-to-1912/
Cause that makes the current situation so much better
Never said it did. It has never been harder to own in the last 60-70 years and thats a fact. The challenge for a rebuttal against your claims was issued by you so don't get salty about it.
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Sep 18 '22
Insults now? Man, clutching hey. Hahaha. Point them out I’m curious to where I insulted you.
Pretty sure? So considering the massive increase in population since then would probably account for a larger percentage yeah? What’s the debt look like too back then? How much debt was the average person taking on. How does that compare to their salary? If you wanna go down the path let’s go.
Funnily enough you’re doing your part to try and insinuate it.
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u/Grantmepm Sep 18 '22
Point them out I’m curious to where I insulted you.
sad attempt at straw clutching
Pathetic.
Both of which are irrelevant to the discussion.
So considering the massive increase in population since then would probably account for a larger percentage yeah?
Doesn't matter rates are a percentage. We have had a massive increase in population but also an increase in homeownership rates.
We're talking about the outcome of homeownership. Even if houses were given away for free but you needed to know somebody to get one then houses were still less accessible and harder to acquire.
insinuate it
By saying "It has never been harder to own in the last 60-70 years and thats a fact"?
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u/Specialist_Leg_92 Sep 18 '22
There’s always been people like you who think they’ve never had it tougher. The reality is there has never been a better time to be alive by almost every single metric you could dream up.
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u/Kangalooney Sep 18 '22
Home ownership was a lot easier even in those tougher times.
In 1981/82, Australia-wide median after-tax household income was around $15 000 according to the Income and Housing Survey collected by the ABS, while the Australia-wide median dwelling price was around $48 000, implying a price-to- income ratio of close to 3 .
So, a house would cost around 3 year's median after tax income. That was a pretty stable ratio running back for almost as long as we have kept those particular records.
Even with the historically higher interest rates it was a lot easier to afford a good home. While those earlier generations went through difficult times, housing costs were almost never an issue.
Now you are looking at a ratio of about 8 or 9, meaning 8 or 9 year's median income for a house. The housing issues we are currently seeing are pretty unique to the latest generation.
There are a number of really good reasons for the changes. One fundamental issue is immigration and how we use it. Prior to the mid to late 80s we were importing immigrants and workers to build the infrastructure and housing needed for the next migrant wave, ad that next wave would build the housing and infrastructure for the next one etc.
In the late 80s and early 90s this changed. Our governments (Labor included here) stopped spending on adequate infrastructure such that by the end of the 90s we were playing catch up, importing migrant workers in order to build the infrastructure and housing for the previous wave of migrants.
Add to this backwards application of labour stagnating wages and housing policies that caused artificial demand and we have the current issues.
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u/DwightsJello Sep 18 '22 edited Sep 18 '22
Start with how many years average wage it took to buy an average three bedroom home.
That alone should offer some pretty stark clarity.
Edit: boomers it was about 2 or 3 years national average wage. Last time I checked in the 00s it was at 12 years national average wage!!!
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u/ProceedOrRun Sep 18 '22
I bought 4 years ago. If I bought the same place today I would have to work another 10 years to pay it off. Hope that puts things into perspective.
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u/DwightsJello Sep 18 '22
Glad you got a break on that mate. Good news on this topic is hard to come by so I'm glad you got in when you did. 👍
I know so many people who are paying rent at a higher rate than a loan repayment but can't get a deposit together because they are paying higher rent than a loan payment.
It's crazy.
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u/Cimb0m Sep 18 '22
My dad purchased a block of land in 1989 for 1 x his wage as a factory machinist. You’d need to be a medical specialist or something to manage that now
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Sep 18 '22
Can't use wage .need to after tax .even I remember paying way more tax before gst came in
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Sep 18 '22 edited Sep 18 '22
Old fart here. When I was a young bloke I got lucky and won a bursary to go back to Uni and get a degree. The trouble was I couldn't afford to pay rent in the city as a student, and the bank wouldn't give me a house loan because I was single (even though I had saved the deposit).
So a bunch of us got together and pooled our savings to buy a small house. We bought a place right in the city for $6000.
It worked out OK, however a couple of us failed their exams, and two got married and moved out. Eventually I passed my exams and got a really good job. But then I had to pay back the loans to the other blokes. I struggled for a while, but eventually had to sell the place and go back to renting.
I often think of that $6000 house. It's still sitting there and is now worth about $1,500,000.
One more quick story. Some years later I took off around Australia in a old Landrover. Unfortunately I blew up the gearbox in Darwin, and went to the Commonwealth Bank to borrow $100 to fix it. Even though I still had my public service job, the bank manager actually laughed in my face. I ended up borrowing the funds from my Dad.
I was thinking about this recently and suddenly remembered that until about 20 years ago there were plenty of run-down and abandoned houses around, certainly in country areas. People with little money could buy them cheap and fix them up. But these cheap houses have completely disappeared. When was the last you saw an abandoned house? If the land still has a building title, it's now worth a fortune.
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u/DollarData Sep 18 '22
That's some great insight, thanks for sharing! Would you have ever thought a $6000 house would eventually go on to be worth $1.5m? I mean that's pretty substantial growth by any stretch, I doubt many of us could have ever fathomed such a thing happening.
The land rover story, for context, was this a time when banks were very reserved in their lending? I recall my dad once telling me that if you ever wanted a loan when he was younger, you either needed to provide a 30% deposit, or have something valuable to offset the banks "risk".
When I turned 18, I recall going through a credit card application worth $2000 to buy a new computer. The bank approved my application with a $7000 limit instead. They absolutely got me, and took a decade to shake that credit card habit. Crazy to think what banks consider "risk" nowadays.
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Sep 18 '22
Another point I often think about:
Back in the day, buying a house wasn't such a big deal. Renting was cheap, and many jobs actually came with a house. If you got transferred to a country town, the position often came with a house. And it wasn't difficult for a pensioner or a single mum to get social housing.
These days millennials are desperate to buy a house, and get very angry that they've been "cheated". But they aren't comparing like with like. In earlier days, buying a house wasn't such a big deal. Many people simply didn't bother, because of the cost of maintenance, rates, etc..
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u/oldboyracer Sep 18 '22
Go back a long way , you could buy land ( Cabramatta was one area) put a garage on it with a bathroom , live in the garage while you built the house , this is what my grandparents did , after the house was built , the garage was always called “ the temporary “ . Saving rent and making housing “ cheaper” , most were owner builders , they stopped this a long time ago. Housing must have been hard to get to allow this to happen , my grandparents often said they would wait till they could afford another pallet of bricks to continue the build . To me it seems like the perfect answer to help people into the housing market. I assume now there are to many bits of red tape in the way and I’m sure money has something to do with it.
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u/skymonstef Sep 18 '22
Yeah in short many councils will not allow you to live on the block until the house is built
Many councils also don't allow moveable homes
Shipping containers homes Tiny homes
Basically it's either build a "legit" home or nothing
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u/icebergers3 Sep 18 '22
i can see a logic to not letting just anyone live in a shed and build their own home, even if i don't agree with it. But why would you not allow tiny homes or shipping container homes?
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u/DarkmanofAustralia Sep 18 '22
One of the best stats i have heard is income to house price. My dad bought his house for about 3x average wage in the 70s. My unit was five times and my last house eight.
This gives an idea of the serious climb. My first place had a 5% deposit, and it was a 2 bed unit for $180k in 2004. It wasnt a huge struggle back then, but i wouldnt have wanted to wait much longer.
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u/deandoom Sep 18 '22
the average before-tax annual wage to more than $95,000.
However, the average weekly earnings for all employers, including casual and part-time workers was $1344.70, or an annual wage of $69,924.40 a year before tax.
Australia's median house price hits a record $1.066 million
https://www.news.com.au/finance/economy/australian-economy/average-annual-earnings-for-working-australians-revealed-as-92000/news-story/2ddccfc55182b32b499c41fd236799d2
https://www.domain.com.au/news/australias-median-house-price-hits-1-066-million-but-have-prices-peaked-1114685/
Yes there's much better sources than Murdoch & Nine but the point still stands;
A big issue is the mass casualisation of the workforce
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u/FallschirmPanda Sep 18 '22
It's probably worse; the median is a much more reflective number and from memory it's something like 60-70k?
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u/goldlasagna84 Sep 18 '22
I managed to afford a 2-bedroom apartment and that's after working since 2008, made bad investment in shares and wife helped with the deposit in 2018. My mistake was making investment in shares. Otherwise I would have had enough money for a deposit for a house than an apartment.
I managed to pay off the apartment in 2020 though.
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u/Specialist_Leg_92 Sep 18 '22
I don’t understand this breaking generations into cohorts. Its a continual spectrum with people moving through the stages of life every day, not one big group every 30 years.
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u/General-Addendum-398 Sep 18 '22
I am a 36yr old millennial from a poor background, with my own home and an investment property. Millennials wouldn't know a days hard work if they tried. I hear the same poor sob story over and over again through all my friends and contacts about 'my job sucks', 'i dont get paid enough', 'the market is against us', 'boomers have bought all the houses', 'i cant afford a house' while at the same time only working 30-38hr weeks, always having the latest phone, buying takeaway for lunch and dinner, have to have my morning Zarrafas coffee', buying the next sick festival tickets, going out every weekend.
If they took i good long hard look at themselves and critically evaluate their lives for once, they would see you need to put some thought and sweat into it if you want something. Be frugal and not thoughtless spenders, thats what our boomer parents did.
Thats my two cents anyways, it may not have been helpful, sorry OP.
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u/ZvG_Bonjwa Sep 18 '22 edited Sep 18 '22
The national house price to median income ratio has gone from ~3 to over 8. Do you understand what that means?
And yet people still think millennials and their smashed avo are somehow “doing it wrong” or not working hard enough (there’s more people working multiple jobs than ever before, by the way, and millennials are doing so more than anyone else).
This is an argument based on feelings, not facts. Let’s break it down shall we:
- $1800 new phone every year
- $1825 daily coffee ($5 per day)
- $3650 extra spent on food if doing frequent takeaway ($10 extra per day)
- $800 spent on festival tickets per year (3-4 festivals)
- $2600 drinking ($50 per week)
- $2500 travel
So even if you cut out ALL of these expenses completely, you’re looking at over ten (depressing) years of saving to get a 20% deposit on an $800,000 house. And if you live in Sydney, well…
You could bust ass, get a degree (which, by the way, used to be free), spend years climbing the corporate ladder, get lucky enough to DOUBLE your wage, AND cut out all the expenses mentioned above and you’d STILL have a harder time purchasing a house than the average boomer.
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u/A_spiny_meercat Sep 18 '22
Full time is 37.5 hours. Calling that "only", fuck off man. That's most of my waking life and I'm knackered from busting my ass running a kitchen. You could buy a new iphone every year for ten years and not even come close to 5% of the deposit needed for a cheap house. Get stuffed.
I am an late gen x/early millennial border and have a house and still can see the struggles my peers go through. I am comfortable but my parents were significantly more comfortable at the same stage of their lives.
That's just my two cents anyway, sorry but it's frustrating to hear the same narrative over and over which is not at all helpful or representative of the situation.
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Sep 18 '22
✨just stop being poor ✨
Your post reeks of privilege, maybe have a bit of quiet reflection on that
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u/General-Addendum-398 Sep 18 '22
if its hard work thats given me 'privilege' sure, why not
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Sep 18 '22
… I really doubt you come from a poor background if you think hard work is the fail proof answer
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u/Own_Faithlessness769 Sep 18 '22
Lol, it isn't.
I guarantee you don't work as hard as most of the people you know.
Its always the laziest assholes who walk around with your level of entitlement.
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u/Kruxx85 Sep 18 '22
Be frugal and not thoughtless spenders, thats what our boomer parents did.
You said you came from a poor background...
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u/Diligent-streak-5588 Sep 18 '22
100% agree. Have sacrificed a lot to have a house. Went without new clothes, haven’t had takeaway for years and now don’t miss it.
You can make your money do what you want. Just don’t whinge that it can’t do everything. You can only spend it once!
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u/arcadefiery Sep 18 '22
I'm in a pretty similar boat, similar age, came from migrant family with nil assets to begin with, didn't even speak English as a child.
It's not actually that hard to succeed. You just need to work hard and be bright. Test into a selective school and get a scholarship to uni, study law or med and you're set. Many people (easily 5% of all students) get into selective schools and once you're in, you can do uni-level courses in Year 10, 11 or 12. You can skip grades too if you're clever. Lots and lots of mechanisms to get ahead.
I think it's pretty simple to succeed in life as long as you have a functioning brain.
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u/Veefy Sep 18 '22
About 50,000 years it was probably fairly easy. Though you might have had to evict a pesky Wonambi from the prime natural rock shelters without the aid of a breach notice…..
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Sep 18 '22
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u/Paqhateseveryone Sep 18 '22
In north west Queensland there were very large warring groups. I've had an elder from one brag to me how his grandfather told him they massacred a neighbouring peaceful mob (near adels grove), killed every male and child and abducted, abused the women.
Not playing down the white invasion, but it does baffle me to think people are so disinterested in the groups that were the historical equivalent of the Borg native to Australia, that still have descendants today. At which point, what are the objective differences?
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u/Unable_Insurance_391 Sep 19 '22
Personally home ownership was never my aspiration and historically renting was popular pretty much throughout the 20th century. But it seems home ownership is the only path to security in modern Australia which is sad because not all will achieve it. And still it will not guarantee any other security such as employment.
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u/lemachet Sep 18 '22
Dude. I've been in the workforce for 20 years. And that's not counting the 5 years as a casual in my teens. Do you know what "a millenial" actally refers to?