Society/Culture Australian Property Prices to Crash?

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Then they are doing something wrong. We saved just over 50k a year between us for 5 years to get our deposit, if you average it out. We were 23 when we started saving. We obviously started out on less money after Graduating Uni but we steadily increased.

The Average Income in Australia is 88k. As a couple that's circa 180K.

Saving 50k of this is easily achievable. Yes, you need need to make sacrifices along the way but really, its not that hard.
Pre-COVID, the median pre-tax wage was $61,025 (males) and $47,768 (females) for 24-34 year-olds.
That is $48,509 + $40,024 after tax ($88,533 household - nowhere near 180K).

A couple with no kids on a basic budget COL is around $43,160 - so yes, in that circumstance, it is possible to save a deposit over four to five years (earning next to nothing on your savings).

However:
  • Add kids ("clock's ticking, Sarah") and it significantly starts to impact the ability to save. Even if the mother decides to go back to work, the cost of childcare is about $4-5k per year per child (accounting for govt subsidy)
  • These are median wages - which means that half of the people in that age group don't have the same capacity to save for a deposit - even if they live on a budget.
 

FRUMPY

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Pre-COVID, the median pre-tax wage was $61,025 (males) and $47,768 (females) for 24-34 year-olds.
That is $48,509 + $40,024 after tax ($88,533 household - nowhere near 180K).

A couple with no kids on a basic budget COL is around $43,160 - so yes, in that circumstance, it is possible to save a deposit over four to five years (earning next to nothing on your savings).

However:
  • Add kids ("clock's ticking, Sarah") and it significantly starts to impact the ability to save. Even if the mother decides to go back to work, the cost of childcare is about $4-5k per year per child (accounting for govt subsidy)
  • These are median wages - which means that half of the people in that age group don't have the same capacity to save for a deposit - even if they live on a budget.
No house, renting, living right up to or beyond their means.....and they decide to have kids......and then complain about not being able to afford anything....

thats got nothing to do with negative gearing im afraid.
 

HirdsTheWord

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Jun 19, 2014
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Pre-COVID, the median pre-tax wage was $61,025 (males) and $47,768 (females) for 24-34 year-olds.
That is $48,509 + $40,024 after tax ($88,533 household - nowhere near 180K).

A couple with no kids on a basic budget COL is around $43,160 - so yes, in that circumstance, it is possible to save a deposit over four to five years (earning next to nothing on your savings).

However:
  • Add kids ("clock's ticking, Sarah") and it significantly starts to impact the ability to save. Even if the mother decides to go back to work, the cost of childcare is about $4-5k per year per child (accounting for govt subsidy)
  • These are median wages - which means that half of the people in that age group don't have the same capacity to save for a deposit - even if they live on a budget.
Having Kids is a choice. If you choose to do it than you cannot turn around in the same breath and sook about housing prices. Everyone knows having kids is just about the most expensive thing you can do, outside of buying a house. Having kids is not an excuse to not being able to save for a house deposit.

If you want to own a house and you cant afford kids then don't have them.

Me and my wife deliberately waited until after we bought a house before we had our daughter, so we cam maximize our savings for a deposit. that's a choice we made.
 

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HirdsTheWord

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Jun 19, 2014
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I would class anyone earning over $100k as high earner tbh (or earning enough to be doing well) - then add to that if their is wife/husband has a job as well. Obviously there are different ranges of high earners as well, $200k+, $300k+ and so on.
im in the 300k bracket and i certainly care about 100,000 movement on housing prices.
 

FRUMPY

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We read and follow the barefoot investor who recommends you save 40% of income and live off 60%. We increased our savings yo 60% and we still do pretty well. Obviously a bit of an outlier as our household income is significant.

works well for us.

Those only saving 5% as someone quoted previously seriously need to re look at their budget.
Ive never actually worked out how much we save as a % but i reckon it would be around 20-25% and always has been around that mark i reckon. My missus didnt work while she raised the kids (did some side work but bugger all) and we saved about the same %. Now she works full time (kids old enough to look after themselves to a degree) we can now afford the things we may have been going without and savings up maybe a fraction, but also paying off more of the home loan etc.

The plan is to buy a new home and rent this one out. The new home will be newer (dont think we'll build), bit bigger (two bathrooms and two toilets for starters) but in the same area. We just got a new caravan and planning for a wedding, so we hope to have enough for a decent deposit within 2-3 years - give or take.
 

Suspense

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Having Kids is a choice. If you choose to do it than you cannot turn around in the same breath and sook about housing prices. Everyone knows having kids is just about the most expensive thing you can do, outside of buying a house. Having kids is not an excuse to not being able to save for a house deposit.

If you want to own a house and you cant afford kids then don't have them.

Me and my wife deliberately waited until after we bought a house before we had our daughter, so we cam maximize our savings for a deposit. that's a choice we made.
Yes, you are right. There is absolutely no biological, societal or familial pressure on young adults to have children in their 20s and early 30s.

This has nothing to do with "sooking" (I have my own home), I just don't think it is an ideal situation that young families should need to choose between starting a family at the optimum age biologically and saving for a house deposit.

I also don't think that is ideal that those earning less than the median wage, even if they budget, should be locked out of homeownership.
 

FRUMPY

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Yes, you are right. There is absolutely no biological, societal or familial pressure on young adults to have children in their 20s and early 30s.

This has nothing to do with "sooking" (I have my own home), I just don't think it is an ideal situation that young families should need to choose between starting a family at the optimum age biologically and saving for a house deposit.

I also don't think that is ideal that those earning less than the median wage, even if they budget, should be locked out of homeownership.
They're not but they will find it hard to buy a house in certain areas and with all their wants/needs.
 

HirdsTheWord

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Jun 19, 2014
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Yes, you are right. There is absolutely no biological, societal or familial pressure on young adults to have children in their 20s and early 30s.

This has nothing to do with "sooking" (I have my own home), I just don't think it is an ideal situation that young families should need to choose between starting a family at the optimum age biologically and saving for a house deposit.

I also don't think that is ideal that those earning less than the median wage, even if they budget, should be locked out of homeownership.
I am totally in agreeance that the Income to Housing price is beyond sustainable and something needs to be done to minimize it or even bring it back to a more appropriate level, however in saying this regardless people still need to sacrifice in order to get ahead.

Having kids, Going on Holidays, Driving new Cars, Partying. Eat Out etc is all stuff that is a choice, it is not a requirement. If people are whining (not saying you) they cant save a deposit and still any of these things than they are not living within their means.
 

HirdyLannister

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well I cant speak for everyone but our household income is 300K plus (if we hit our bonuses etc) and we certainly care about 100,000 lol
If your household is 300k you would be in the top 5% earners easily.

109k for a single wage is considered top 10% of earners.

Our household is around 200k combined and we have 3 properties, I'm 33 girlfriend is 31 and no kids.
We travelled alot but sacrificed other things, rarely eat out and make everything at home.
Will look at kids Soonish but agree it's a choice and people shouldn't complain after having them.
 
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Suspense

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I am totally in agreeance that the Income to Housing price is beyond sustainable and something needs to be done to minimize it or even bring it back to a more appropriate level, however in saying this regardless people still need to sacrifice in order to get ahead.

Having kids, Going on Holidays, Driving new Cars, Partying. Eat Out etc is all stuff that is a choice, it is not a requirement. If people are whining (not saying you) they cant save a deposit and still any of these things than they are not living within their means.
Sure, some sacrifice is necessary - anyone living the YOLO lifestyle, pissing up their paycheck week to week or buying a new Maloo ute every year probably isn't going to get much sympathy.

Even without kids, 40% saving rate of median household income of $88,533 is $35k. As I said, over five/six years it's doable but challenging - and more challenging for those beneath the median.

Tell that to anyone older than 45 and they will regale you with tales of the two years they spent "budgeting" while they paid off their $30k home.
 

Nuggs Bunny

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I am totally in agreeance that the Income to Housing price is beyond sustainable and something needs to be done to minimize it or even bring it back to a more appropriate level, however in saying this regardless people still need to sacrifice in order to get ahead.

Having kids, Going on Holidays, Driving new Cars, Partying. Eat Out etc is all stuff that is a choice, it is not a requirement. If people are whining (not saying you) they cant save a deposit and still any of these things than they are not living within their means.
Millennials are having kids later than any other generation, own fewer cars than the previous two generations and I'd love to see the stats on "partying" and "eating out" because people are carrying on in this thread like millennials invented the concept of the music festival, the cafe and having alcohol on tap. The only thing millennials are doing more than their predecessors is going overseas, mostly because overseas travel became much cheaper and easier about 15 years ago. Did Gen Xers not take holidays or something?

In fact, No stats on spending habits that I've seen show that Gen Y or Z are any more frivolous on average than what the Boomers and Gen X were, would love to see some to the contrary. Seems like saying people aren't living within their means is a total cop out just to deflect.
 

Golden_6

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Then they are doing something wrong. We saved just over 50k a year between us for 5 years to get our deposit, if you average it out. We were 23 when we started saving. We obviously started out on less money after Graduating Uni but we steadily increased.

The Average Income in Australia is 88k. As a couple that's circa 180K.

Saving 50k of this is easily achievable. Yes you need need to make sacrifices along the way but really, its not that hard.
How many people can save $500 a week? The answer is barely any unless you are living at home with barely any expenses. If you are saving $1,000 a week as a couple and live out of home, then lucky you because you’re one of the lucky ones that have high paying jobs and housing isn’t an issue to you.

Quoting the average Australian wage is pointless given first home buyers are at the beginning of their career and as a generalisation are no where near that amount of income.
 

Nuggs Bunny

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Sure, some sacrifice is necessary - anyone living the YOLO lifestyle, pissing up their paycheck week to week or buying a new Maloo ute every year probably isn't going to get much sympathy.

Even without kids, 40% saving rate of median household income of $88,533 is $35k. As I said, over five/six years it's doable but challenging - and more challenging for those beneath the median.

Tell that to anyone older than 45 and they will regale you with tales of the two years they spent "budgeting" while they paid off their $30k home.
Schroedinger's Boomer: Will happily tell you how they and the lads went to the pub every night to get sloshed but reckons that younger generations don't know how to save their money.
 

HirdyLannister

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Millennials are having kids later than any other generation, own fewer cars than the previous two generations and I'd love to see the stats on "partying" and "eating out" because people are carrying on in this thread like millennials invented the concept of the music festival, the cafe and having alcohol on tap. The only thing millennials are doing more than their predecessors is going overseas, mostly because overseas travel became much cheaper and easier about 15 years ago. Did Gen Xers not take holidays or something?

In fact, No stats on spending habits that I've seen show that Gen Y or Z are any more frivolous on average than what the Boomers and Gen X were, would love to see some to the contrary. Seems like saying people aren't living within their means is a total cop out just to deflect.
Regards to vehicles, I always see P players running around in brand new Ford rangers, hilux, turbo hatches you know something isn't right.
When was the last time you seen a P plate driver in an older standard car. I'm only 33, got my licence in 2006 and my first car was made in 1991. A guy at work went halfs in a 2018 Subaru for their daughter. Was like 12k each put in, why does a 18 year old need a 24k vehicle?
 

Golden_6

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Regards to vehicles, I always see P players running around in brand new Ford rangers, hilux, turbo hatches you know something isn't right.
When was the last time you seen a P plate driver in an older standard car. I'm only 33, got my licence in 2006 and my first car was made in 1991. A guy at work went halfs in a 2018 Subaru for their daughter. Was like 12k each put in, why does a 18 year old need a 24k vehicle?
Purely anecdotal but not the case in my friendship circle. We all started with early 2000’s cars (licenses in 2012). My first car was a 2001 Ford AU which cost $3.5k and 8 years later it’s still going strong.
 

Kram

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Late 90s on P plates knew 3 blokes that worked for their family business bought brand new VT Commodores.

Everyone else only had very ordinary old cars.
 

Cuzz09

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Im on like 60 something and GF is 3 days a week like lucky to make $20k with a disability.

My mind explodes at the thought of earning $300k!

We get by on our pay with mortgage etc but I know if I was on 5x more Id have 5x more that lifestyle

Im not having a go at all... Good on everyone that earns big money.

$300k
 

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