When you read articles about Australian housing affordability, it is often comparing the single average adult wage to house prices, from generations ago.
The articles generally say something like, ‘a house was worth three times the annual average wage back in the sixties and is now worth 10 times the average wage. This shows housing has become unaffordable.’
You can’t compare the two because back in the sixties it was one wage bidding on real estate.
There are changing trends shaping the mortgage market, enabling banks to keep lending. To gain further insights into these trends and the broader economic and market outlook, I reached out to a well-established finance and property guru in Australia — my good friend, Pete Wargent — for an interview. Check it out below…
If you look at the run-up to the peak in the last few cycles — 1973, 1989, 2008 — rates always rose alongside prices (much like they’re doing now, as we approach the expected 2026 peak). Trends of the past will no doubt feature in the run-up to the peak of this cycle. It’s already occurring globally…
A headline this week ‘House gains more than $50,000 in six months — by owners doing nothing’ reminded me of 19th-century political economist John Stuart Mill’s belief that the government should collect society’s economic rents instead of taxes that impede productive labour and industry. Read on for more…
Shifts in the median price hide a lot. After all, the median is just the middle number of a bunch of sales. If the top end of the market falls sharply (as in most downturns), the median will come down somewhat — but the actual fall in property prices can be far more apparent. Read on for a breakdown of the recent 2022 downturn…
Many want to know how to time and sell at the top of the real estate cycle. This is not an easy task. In truth, severe economic downturns — such as what we see at the end of a cycle — never come when people are expecting it. The key is to know how to ride the boom and hedge against the bust. Read on to find out how to get such insight…
The Victorian government has announced the implementation of a new land tax levy. It has understandably sparked discontent among landlords, who will bear the brunt of the increased taxes. Predictably, property lobby groups wasted no time in denouncing this new levy, warning that it will inevitably lead to skyrocketing rents. However, let’s set the record straight: the notion that landlords can effortlessly pass on land taxes to renters is nothing but a fallacy! Read on…
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