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Australian Median Property Prices from 1982 to 2004

Australian Median Property Prices from 1982 to 2004

Old May 10th 2005, 2:00 am
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Default Australian Median Property Prices from 1982 to 2004

Some food for thought on property price changes over the years:

Median Property Prices from 1982 to 2004

Perth from $48,200 to $267,000 = 454% = 8.10% average per year
Brisbane from $55,100 to $309,000 = 461% = 8.15% average per year
Sydney from $82,600 to $471,500 = 471% = 8.24% average per year
Canberra from $59,000 to $350,000 = 493% = 8.43% average per year
Adelaide from $45,500 to $270,000 = 493% = 8.43% average per year
Melbourne from $50,500 to $382,000 = 656% = 9.63% average per year

2004 values from http://www.loan.echoice.com.au/pages...ng_market.html
1982 values from http://www.reiaustralia.com.au


If Brisbane was to catch up with Melbournes average growth over the last 22 years, the median price here should be (statistically speaking ) $416,000 :scared:
 
Old May 10th 2005, 4:28 am
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by ABCDiamond
Some food for thought on property price changes over the years:

Median Property Prices from 1982 to 2004

Perth from $48,200 to $267,000 = 454% = 8.10% average per year
Brisbane from $55,100 to $309,000 = 461% = 8.15% average per year
Sydney from $82,600 to $471,500 = 471% = 8.24% average per year
Canberra from $59,000 to $350,000 = 493% = 8.43% average per year
Adelaide from $45,500 to $270,000 = 493% = 8.43% average per year
Melbourne from $50,500 to $382,000 = 656% = 9.63% average per year

2004 values from http://www.loan.echoice.com.au/pages...ng_market.html
1982 values from http://www.reiaustralia.com.au


If Brisbane was to catch up with Melbournes average growth over the last 22 years, the median price here should be (statistically speaking ) $416,000 :scared:
So how many hours would a house buyer work if a house buyer would buy a house? In after tax, after neccessities hours? 1982 & 2004?
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Old May 10th 2005, 5:53 am
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by Megalania
So how many hours would a house buyer work if a house buyer would buy a house? In after tax, after neccessities hours? 1982 & 2004?
A complex question, but on National gross wages, compared to Brisbane property price the answer for the years 1984 and 2004 is:
1984 - 9,562 hours
2004 - 11,856 hours


Based on average wage being earned over a 48 hour week in 1984 and a 38 hour week in 2004 other variables will render these figures absolutely useless
 
Old May 10th 2005, 12:28 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by ABCDiamond
Some food for thought on property price changes over the years

Adelaide from $45,500 to $270,000 = 493% = 8.43% average per year
Yes, these averages are interesting, but I'd argue that 2004 was about the peak. If JP Morgan are correct and there'll be a 10% fall in 2005 then next year we have:

Adelaide from $45,500 to $243,000 = 434% = 7.56% average per year

A further 10% fall the year after gets us:

Adelaide from $45,500 to $219,000 = 381% = 6.77% average per year

I'd also argue that $270k average house price in a place where the average wage is under $45k is an unsustainable income to house price ratio. IMHO we are about to see just how unustainable it is.
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Old May 10th 2005, 12:35 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by sackofspuds
Yes, these averages are interesting, but I'd argue that 2004 was about the peak. If JP Morgan are correct and there'll be a 10% fall in 2005 then next year we have:

Adelaide from $45,500 to $243,000 = 434% = 7.56% average per year

A further 10% fall the year after gets us:

Adelaide from $45,500 to $219,000 = 381% = 6.77% average per year

I'd also argue that $270k average house price in a place where the average wage is under $45k is an unsustainable income to house price ratio. IMHO we are about to see just how unustainable it is.
This would happen over the whole of Western linked world surely ?


If not why Australia specifically ?

House prices in Central/inner Melbourne, seem to be still rising, if the Auction Mortgage results are any guide.
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Old May 10th 2005, 12:36 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by sackofspuds
Yes, these averages are interesting, but I'd argue that 2004 was about the peak. If JP Morgan are correct and there'll be a 10% fall in 2005 then next year we have:

Adelaide from $45,500 to $243,000 = 434% = 7.56% average per year

A further 10% fall the year after gets us:

Adelaide from $45,500 to $219,000 = 381% = 6.77% average per year

I'd also argue that $270k average house price in a place where the average wage is under $45k is an unsustainable income to house price ratio. IMHO we are about to see just how unustainable it is.
Might be 2 x $45k average wages sustaining 1 x mortgage on $270k average house.
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Old May 10th 2005, 12:52 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by ozzieeagle
This would happen over the whole of Western linked world surely ?


If not why Australia specifically ?

House prices in Central/inner Melbourne, seem to be still rising, if the Auction Mortgage results are any guide.
Correct, I believe the market in the UK at least will behave similarly. Sales volumes in the UK are the lowest since 1995 now.

As for prices still rising, I think you have to be careful. When sales volumes drop substantially then initially, IMHO, it tends to be only the better properties that sell. The question then is what happens to the stuff that sticks? Either it gets taken off the market or, eventually, the price drops to reflect the changed conditions.
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Old May 10th 2005, 12:53 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by Megalania
Might be 2 x $45k average wages sustaining 1 x mortgage on $270k average house.
Interesting you should mention that, makes me think back a bit, and do a quick comparison calculation.

When my dad bought a house for £6,000 the family income was £2,000, so the house was 3 times income.

Your example has a household income of $90,000 and the house of $270,000, exactly the same income multiplier But quite a few years difference
 
Old May 10th 2005, 12:56 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by Megalania
Might be 2 x $45k average wages sustaining 1 x mortgage on $270k average house.
Yes, absolutely. The thing is, multiples like this have been unustainable in the past and I don't think we're in a new paradigm.
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Old May 10th 2005, 1:25 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by ABCDiamond
Interesting you should mention that, makes me think back a bit, and do a quick comparison calculation.

When my dad bought a house for £6,000 the family income was £2,000, so the house was 3 times income.

Your example has a household income of $90,000 and the house of $270,000, exactly the same income multiplier But quite a few years difference
And not forgetting deductions for taxation, direct and indirect as well as adjusting for the RPI. Can we have median property prices divided by real disposable income per capita in 1984 and 2004 please? I'm only joking of course, there are too many variables at work here to make easy and worthwhile comparisons.

Regarding the unsustainability of house prices to incomes ratios I would beg to differ. We will only know with 20/20 hindsight but I would expect similar average 8 or 9% p.a. growth in median house prices over the next decade. There might be blips along the way but watch this space in 10 years time.

The other thing to bear in mind is that many things apart from houses are coming down in real terms, even actual prices. How much more affordable are food, electrical goods, cars, furniture, holidays etc, etc now compared to 20 years ago (leaving a higher % of real income available for mortgages). The level of (and attitudes to) credit and lending is also very much different now. We'll see anyway!!

The doom predicted last year for the Melbourne market didn't fully eventuate (where there is an oversupply such as in Docklands it did) and all recent reports suggest prices are going to start rising again and soon.

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Old May 10th 2005, 10:40 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by ABCDiamond
Interesting you should mention that, makes me think back a bit, and do a quick comparison calculation.

When my dad bought a house for £6,000 the family income was £2,000, so the house was 3 times income.

Your example has a household income of $90,000 and the house of $270,000, exactly the same income multiplier But quite a few years difference
Increased investment in households have drastically reduced womens work leaving women freer to sell their labour for cash - bringing in another income to pay for the capital improvements in housing.
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Old May 10th 2005, 10:50 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by sackofspuds
Yes, absolutely. The thing is, multiples like this have been unustainable in the past and I don't think we're in a new paradigm.
Allowing for dual income households, the multiples in some places are not overstretched when compared on historical levels. On dual incomes many houses on the outer fringes of Melbourne are still within the 3x multiple. It is the dual income family/couple alone that has fueled the housing affordibility. There is no way the average bloke can earn enough to buy some of the homes out there.

But I suppose 30+ years ago, the point is that one income was enough.

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Old May 10th 2005, 11:31 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by Badge
But I suppose 30+ years ago, the point is that one income was enough.

Badge
Not only was it enough, but it was the norm. Just as today, two incomes seem to be the norm.
 
Old May 10th 2005, 11:51 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by ABCDiamond
Not only was it enough, but it was the norm. Just as today, two incomes seem to be the norm.
So now two incomes is the norm and women's participation in the work force is approaching that of men, only increases in the general participation rate in the workforce (+productivity etc) will increase general household real incomes - rate of capital appreciation of houses will taper back to the rate of increase in participation + productivity?

In other words, increased women's participation has had a one off, generational effect of raising house prices?
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Old May 10th 2005, 11:58 pm
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Default Re: Australian Median Property Prices from 1982 to 2004

Originally Posted by Megalania
So now two incomes is the norm and women's participation in the work force is approaching that of men, only increases in the general participation rate in the workforce (+productivity etc) will increase general household real incomes - rate of capital appreciation of houses will taper back to the rate of increase in participation + productivity?

In other words, increased women's participation has had a one off, generational effect of raising house prices?
Maybe at least until we get to the three or four income families being the norm

(that thought must be just as scary to us, as two income households would have been once upon a time, to some people)
 

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