Quote:
Originally Posted by Hagar
Funny you quote figures like this. The same house I bought in Craigieburn sold about 12 months back for $425K a fair jump from the $40K I paid for it in 1980. Then again my salary in 1980 was less than $100 take home as an electrical tradesman. The same tradesman today earns in excess of $1000 take home.
You should try and employ a tradesman for less than this. It's near impossible.
|
Doug, personal anecdotes are not a great way to objectively identify what is happening here across the population.
Look at the graph in this link. House prices are far outstripping wages growth across the country. [maybe less so if you're a tradie, building and fixing houses!] Tradies & builders do really well out of a housing boom (and a heap of 'home improvement' soaps on TV) - they are not representative of wages in the full workforce. I saw this firsthand with my dad in the 1980s and 1990s in the UK.
Quote:
Originally Posted by multiweb
You just have to check how many credit card/debt recovery services, etc... are advertised on TV. People spend the money they don't have. They get in debt. It's the new "normal". House prices have risen a lot but interests have dropped a lot too. Borrowing money and large amounts has been made very easy. Back in the day you were limited in the amount you could borrow and had to come in with a substantial deposit. Is it harder to buy a house today? Nope. You just walk in the bank, borrow half a mill and get all the trimmings. Is it dearer. Hell yeah! Doesn't mean common sense shouldn't prevail. If you can't afford it rent. If you can afford it, start small and work your way up getting out of debt as you move along.
|
Marc, that's all easy to say, but personal credit card debt doesn't explain a relative doubling of house price. Easier
mortgages might explain some of it, but that's spectacularly unsustainable - see the UK and USA around 2007-08. You can't 'start small' today, unless you want to start 50% smaller than your parents generation of 25 years ago. You'll probably also be further from your work, so spending more income on travel. Sensible rules such as borrowing no more than 3-4x your salary don't buy you what it did in those days. Part of the reason is that you are more than likely competing against investors rather than other homeowners, as the data shows.