(03) 9020 2905You mean these days? Like today? Well, um, probably not very.
Bu-u-u-t … who needs a home, when for just $100,000, you could buy KITT – David Hasselhoff’s legendary wheels from Knight Rider!
There’s a lot wrong with research saying houses were “cheaper” 40 years ago.
Because it fails to point out a fundamental societal change. From about the early 70s, the number of two-income households started rising. Sure, house prices might have risen from 5.8 to 9.3 times average earnings. But it’s far less dramatic when the average number of earners per household is factored in.
And Gen Xers are partly to blame. We tossed out “teenage” and adopted “adolescent”, which was our excuse to avoid responsibility until we were 30. We fought growing up and getting married, so we all went out to work.
However, it does mean that single people will find it harder to buy a home. But bachelor pads never went out of fashion. And “Ladettes” now have their own TV show!
If you’re looking to buy your first home, take some advice from Hitchhikers Guide to the Galaxy: “Don’t panic!”
Property prices, like all assets, are cyclical. Sometimes demand runs too hot. Other times, property is on the nose and it’s actually relatively cheap.
Save hard. Think counter-cyclically – buy when prices are down. And lower your sights for your first place. You can trade up later.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser.