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Housing markets and wage growth – were we better off 20 years ago?

Source: OpenAgent

It’s a great topic of conversation at many a backyard barbecue. At some point over the past year, you’ve probably found yourself chatting to your mates about the good old days. And for those who are trying to get a foothold in the midst of Australia’s current housing climate, the dialogue has probably been centred around housing affordability.

When it comes to the basic cost of living, many feel a dollar just really doesn’t go as far as it used to. As it so happens, this isn’t just economic paranoia – we are living in a period of time where the cost of living for essentials has actually skyrocketed.

So what are the differences?

1998 vs now

Where have properties seen the most growth?

City 1998[1] June 2018[2] % increase
Melbourne $155,000 $855,000 452%
Sydney $248,750 $1,150,357 363%
Hobart $107,250 $492,000 359%
Adelaide $118,600 $470,000 351%
Canberra $155,500 $641,000 313%
Perth $141,000 $510,000 262%%
Brisbane $159,500 $515,000 223%
Darwin $173,500 $505,000 191%

By and large Melbourne would’ve been the best investment for your money. If you had access to a smaller amount of capital at the time, you could have invested in Hobart and Adelaide and seen similar kinds of returns to Sydney.

We’ve also done some comparisons on those every day costs.

1998 Now
Average national annual income $32,163[3] $81,530[4]
Average petrol price at the pump 68c per litre[5] $1.45 per litre[6]
12 month average loan size $118,375 $374,050[7]
Streets Paddle Pop 50c $1.50

[1] Peter Abelson and Demi Chung, Housing Prices in Australia: 1970 to 2003

[2] Real Estate Institute of Australia: Australian capital cities median house price falls: Media Release,13 June 2018

[3] Australian Bureau of Statistics 5673.0.55.001 – Regional Wage and Salary Earner Statistics

[4] Australian Bureau of Statistics 6302.0 – Average Weekly Earnings, Australia, Nov 2017

[5] Bureau of Infrastructure, Transport and Regional Economics, Canberra: Petrol Prices in Australia

[6] Global Petrol Prices

[7] Australian Bureau of Statistics









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