Australia's housing affordability crisis | Kaboodle Finance

Australia’s housing affordability crisis

May 31, 2017

Tim Gurner made waves earlier this month in his interview with 60 Minutes Australia in a segment about Australia’s housing affordability crisis. Mr Gurner copped backlash after suggesting young people spent too much money on travelling, coffees and smashed avocado.

The young rich lister who made his fortune off the back of Australia’s capital city property boom told 60 Minutes “when I was buying my first home, I wasn’t buying smashed avocado for 19 bucks and four coffees at $4 each”.

During the brutal smackdown, which caused outrage, he also told millennials to get realistic about their expectations.

“There is no question we are at a point now where the expectations of younger people are very, very high,” he told 60 Minutes.

In the same segment it was revealed that it costs an Australian household less to own a property in 2017 than it did in 1990. In 1990, the average Australian household spent 38% of their monthly income on mortgage repayments. In 2017, that figure is 29%. Daniel Joseph from Blue Wealth Property writes “I’d wager that this point would come as a surprise to many Australians. The figure below tracks the percentage of income a household in Sydney, Melbourne and Brisbane spent on mortgage payments between 1990 and 2016. If you owned an average house in Sydney in 1990, you’d spend 53% of your monthly income on mortgage payments. That figure in 2017 is a tick over 40%.”

Kim decided to interview her Mum, Sue, to find out what it was like to buy your first home back in the 1970’s. Sue purchased her first home with her husband at the ripe old age of 21. They renovated themselves and lived within their means, utilizing second hand furniture for a number of years until they could actually afford to buy themselves new furniture. Sue’s comment “Young people want to start where their parents finished” definitely strikes a chord!