Then vs now: Remembering buying our first home in the 70s

It was and always has been the Australian dream to buy a home for your family. A nice brick or a plywood house with a picket fence and a big backyard with a Hills Hoist. We didn’t need much but our house was our pride and joy – we worked hard to buy and keep our first homes.

Do you remember your first home you bought in the 70s and 80s? It typically had three bedrooms, one bathroom and an open kitchen/meals with a separate lounge. There were the A-frame houses; the ghastly avocado green, dark orange and mustard yellow; exposed wood, popcorn ceilings, linoleum floors and laminate cabinetry.

There was a major housing boom after WWII, not to mention a baby boom, which was also fuelled by more immigration and the pursuit of a new Aussie dream: to own a home in the suburbs. The rate of home ownership increased from around 40 per cent in 1947 to over 70 per cent in 1960 and sparked a massive phase of building and construction in Australia.

Living rooms were very groovy in the 70s

Houses got bigger as Australians continue to become more affluent and second bathrooms and extensions were added.

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Back then, the bank would loan 2.5 times the husband’s income plus the wife’s income. It seems everything was different back then compared to now, but that way of doing things made it easier to handle any changes on interest rates if one person stopping work. Nowadays, there is no room for anything to go wrong with that amount of debt.

In the early 70s, we had to have 33 per cent deposit. We also had to have a minimum amount in an approved savings account for at least 12 months, and couldn’t commit more than 25 per cent of disposable income to mortgage repayments. In those times, you could lock in a mortgage for 25 years so you knew exactly what your commitments were. And interest rates were a lot higher so there was a lot more incentive to pay off the home earlier. Interest rates in the 70s were highest in mid 1975 at 10.38 per cent. Today, our variable home interest rates are around 5.65 per cent.

Do you remember these toilets?

Fast forward to today, financially we couldn’t do that. The difference between income and housing prices is massive compared to what it was in the 70s and 80s, before the big crash. Now, it is much easier for overseas buyers to buy and hold property in Australia than in the 70s. The first buyers’ home grant was means tested in the 70s and only the lowest income earners were eligible. The housing market wasn’t being used to finance people’s retirements to the extent it is today and the population wasn’t as large.

So why has the housing system and property prices changed so much in the last 40-50 years? According to CEO of the Real Estate Institute of Australia (REIA) Amanda Lynch, there are a myriad factors, including an undersupply of housing, land-development processes and policies, the cost of construction and property-related taxes, as well as outside factors such as comprehensive taxation reform.

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As a comparison, here are the median house prices in Australian capital cities in 1973:

  • Sydney – $27,400
  • Melbourne – $19,800
  • Brisbane – $17,500
  • Adelaide – $16,250
  • Perth – $18,850
  • Canberra – $26,850
  • Hobart – $15,200

Data via Domain

And now, these are the median house prices in Australian capital cities as of September 2014:

  • Sydney – $843,994
  • Melbourne – $615,068
  • Brisbane – $473,924
  • Adelaide – $459,258
  • Perth – $604,822
  • Canberra – $573,326
  • Hobart – $322,274
  • Darwin – $667,115
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Data via Domain Group’s House Price Report

With this all considered, the average weekly wage in 1973 was $111.80 and now the average full time worker makes $1453.90 weekly. How did we do it? Well, the average house used to be approximately three times our average income and now it’s about six and half times. No wonder our children struggling to pay their mortgages.


So let’s talk today: What did you buy your first home for and was it affordable for you? Have you noticed how much more difficult it is to pay off or purchase houses now? What issues have you had in regards to buying a home?