Will your children ever afford a good house in a nice suburb? 153



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The media have yesterday declared that Australia’s property market in capital cities is hot… positively hot! 23% growth in Sydney, 19% growth in Melbourne and 14% growth nationwide over the last 7 months proves it in a very significant way, and it leaves me wondering whether you worry for your children and grandchildren’s ability to buy a house.

The median house price in Sydney is now $914,056 while Melbourne’s sits at $604,110, a far cry from the prices most Boomers bought their own houses. Looking back to 1970, the median house price in Sydney was $17,750 and in Melbourne, it was $12,670.

I travelled through Melbourne this week meeting millenials in the media industry for my work. As I travelled around telling the stories of how wonderful our readers in Starts at 60 are, many younger people cursed at the Baby Boomers who are holding onto their home through this astronomical housing boom, and investing in property with their long-gotten gains. They blamed the boomer for their inability to get into the property market. And it leads me to the question of whether you have younger people in your lives who will ever manage to get into the property market we see today?

The Australian dream is long-held. Fall in love, get married, move to a house in the suburbs and renovate it until its picket fence is white and pretty. Live there for many years until you need to upsize to accommodate the kids, renovate again, and stay there until you retire and then, either stay on forever until your family sell it out from you when you move to aged care, or increasingly, make an active and unromantic decision to downsize and move on to your retirement dream location, freeing up cash for the trips of a lifetime.

Source: RP DATA Financial Rview
Source: RP DATA Financial Review

But what if our younger generations can’t enjoy this incredible experience? Is that ok? Or would you be forlorn for them?

Few people would consider house prices within or near any Australian capital city as being cheap right now. In fact, most people would consider them to be expensive, uncomfortable and perhaps inflated beyond control. Economists are concerned, the Federal Reserve is concerned and the banks are concerned too. This week we saw the banks step into action rather strongly, knowing the Reserve Bank can do little to cool a boom while consumer confidence and employment remain stressed. AMP simply declared their home lending business was closed to new customers, and ANZ, NAB and CBA all raised their interest rates on existing investment loans. In an environment where real interest rates are not really able to rise, it is an entertaining spectacle to watch consumer banks that are profit driven pull back on exposure to upside since APRA insisted they boost their core equity buffers on investment loans by up to two percent.

They don’t really want the party to stop, and we are seeing it in the fact that owner occupier lending rates are in fact dropping rates to compensate, keeping volumes up.  But it begs the question…

Do you really want to leave your family home to move somewhere smaller?  Or are you just happy where you are?  And do you worry for your younger family members in the housing market?  

How much did you pay for your first home and how old were you? 

Rebecca Wilson

Rebecca Wilson is the founder and publisher of Starts at Sixty. The daughter of two baby boomers, she has built the online community for over 60s by listening carefully to the issues and seeking out answers, insights and information for over 60s throughout Australia. Rebecca is an experienced marketer, a trained journalist and has a degree in politics. A mother of 3, she passionately facilitates and leads our over 60s community, bringing the community opinions, needs and interests to the fore and making Starts at Sixty a fun place to be.

  1. 1979. $27,00 on a main rd. Not in a good suburb but what we could afford. Greed has pushed prices up not any generation. I wonder if young people today would want a house with the toilet outside as ours did?

    1 REPLY
  2. $48,000 at Cranbourne. It was a new AV Jennings home without an en-suite. This was followed 8 years later by a $77,000 home in a small country town. Outside loo with septic and the front of the house needed lifting by 8″. Most of our furniture was second hand.

  3. if your over sixty your kids should have a house,unless they have been gadding about like enjoying their selves ,when saving for a house should have been a priority the speed housing is rising .

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    • I still support my son financially who is studying for a PHD unfortunately part time, as he has part time work as well, wish I had the cash to give him, so he could study full time, I help him out when he needs it, so not all gadd abouts Gordon. Just not rich parents ha ha. Also depends how old you were when the children came along. Only have one son but my wife and I were 36 when he was born. We made sure the only money we owed was the house before he was born because, we both had gone through watching our parents struggling post war bringing up a family.

    • Brian early twenties we were ,we have two grandkids at UNI their parent aint rich both have jobs good jobs that is and they need support i agree ,we have not had kids at home forgoing on twenty years ,its great we gadd about a bit, thanks for the reply.

  4. 1975. Our house cost $29,000, in the same suburb where my husband grew up. We still live in the that house . Our combined salary was $156.00 per week. We paid $189 monthly on mortgage . We were 22years old.

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    • We built our home for $24,100 in 1976, no government grants given out then. We bought a trailer for $100 as we needed to build a retainer wall and were broke for 6 months. We managed on one wage.

    • And the interest rates climbed to 17-19% over the 70’s decade. Hard work is what got my wife and I through it, sacrificing the extra’s we used to reward ourselves with every now and then. Do the overtime when it was there, part time job on weekends with my uncle’s business, would not change any of it though. $26000 for house in Coburg Vic. Renovations later on cost $28000. Only house we owned. Loved it.

  5. So unless the kids of today move to where they don’t want to live, no they won’t be able to afford anything unless they win lotto….

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  6. 1986 Unit by the beach in Collaroy Sydney paid $95,000 sold it 4 years later for $225,000 moved to GC Qld built our dream house. My son and daughter in law. Both professionals earning big dollars in London saving to buy a house when they return.

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    • yes you were selling just at the right time…just prior to that house prices were really really low… after that time around 1983-1984 it rose dramatically thats for sure…

  7. Unsure if my daughter and family will get there I am hoping it is before I pass away so I can see that she has a safe and friendly enviornemnt with lots of space and fun areas just for the little ones. My son and his family do my daughters 2 love going there. So do I for that matter. My niece and nephew each are getting a house given to them strange way of amking them learn to do the hard yards.

  8. My neighbourhood is 90% Chinese. My last house I paid $150 000. Chinese have bought it a few times so now it sells for
    $2 million !!!!!!! The whole suburb is horrible now……..so sad

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