The Fading Australian Dream

Thursday, March 23, 2017

Housing affordability is currently a key issue of discussion in Australia and while there are a number of factors at play, the main price driver is that demand for houses is exceeding supply. Population growth, a trend to smaller households (and so more homes needed relative to the population), and demand for homes not only from first home buyers but also from downsizers, overseas buyers, local investors, and self-managed super funds and trusts are all fuelling price rises.

While Australia’s current annual population growth of 1.4% may seem modest, this adds almost 340,000 to our population each year- which is one new Darwin every 20 weeks or a new Tasmania every 18 months.

Where population growth is strongest, house price rises are the highest

Sydney is growing much faster than this having averaged 1.8% per annum for the last five years. It will add almost two million to its population by 2037 – which is the equivalent of adding a new Perth into Sydney. Melbourne is currently Australia’s fastest growing city and based on the current growth trends, it will overtake Sydney to become the nation’s largest city around the middle of this century. Unsurprisingly where population growth is strongest, house price rises are the highest.

Earnings growth has not kept up with house price growth

In just twenty years, the average Sydney house price has increased more than five-fold from $233,250 in 1997 to $1,190,390 today while in Melbourne prices over the same period have increased by more than six times from $142,000 to $943,100 today. While it is true that wages have increased over this time, earnings growth has not kept up with house price growth. In 20 years, average annual full-time earnings have not quite doubled from $42,010 in 1997 to $82,784 today.

The impact of growing demand on house prices is most evident when comparing prices to average earnings. Twenty years ago, the average Sydney house was 5.6 times average annual earnings while in Melbourne it was an affordable 3.4 times annual earnings. Today Sydney homes are more than 14 times average earnings, and in Melbourne more than 11 times annual earnings. While the maxim that house prices double every 10 years is not always the case and growth fluctuates, since 1997 Sydney prices have in effect doubled every 8 years while Melbourne has managed this every 6 years.

If the growth metrics over the last two decades play out over the next two, the average home in both Sydney and Melbourne in 2037 will exceed $6 million. Clearly, the Australian dream of home ownership for the next generation is fading. Young people today need almost three times the purchasing power that their parents needed to buy the average place, so even double incomes will not quite do it. Additionally, today’s new households are starting their earnings years later than their parents, having spent longer in tertiary studies, and they begin their economic life not with zero savings like their parents, but well into the negative- with interest accumulating study debts to pay off. Even if today’s emerging generations start saving harder and earlier and live with their parents longer, home ownership is still not a given.

Policy settings around migration and baby bonuses have grown the population and policies around property tax incentives, self-managed superannuation and investment provisions have fuelled property demand therefore policy support will be required to bring the great Australian dream a little bit closer to reality.

Sources: Population at 2017 (ABS). 1997 prices: Macquarie University (Abelson). 2017 house prices: Core Logic. Analysis: McCrindle

Growing number of Australians moving to New Zealand

Monday, August 15, 2016


They are calling it a slice of heaven on a budget, with a growing number of Australian families packing their bags for a better life in New Zealand.

For the first time in about a quarter of a century, we have more Australians headed to New Zealand than New Zealanders heading to Australia. We aren't talking about people as retirees or as young people, but in those middle years, those family years and those key employment years, they are the ones making the move across the Tasman and heading to New Zealand.

Most of them are ending up in the Kiwi Capitol, Wellington, where you get much more bang for your buck compared to the much more expensive Auckland.

IT Specialists are in hot demand in New Zealand, and dominate the highest paying jobs. A System’s Architect have a median salary of $125,000 per year. Although an Engineering Manager isn’t all that far behind at $105,000 per year. The lowest paying jobs see Caregivers average $32,000 per year, while an Assistant Store Manager brings in $35,000 per year.

Australians are making the move because of jobs, affordable housing and a better quality of life. For a country that for so long has been tagged as Australia’s little cousin, it appears New Zealand is all grown up.

Welcome to our blog...

We have a passion for research that tells a story, that can be presented visually, that brings about change and improves organisations. And we hope these resources help you know the times.

Our Social Media Sites

Facebook | McCrindle Research Social Media YouTube | McCrindle Research Social Media Twitter | McCrindle Research Social Media Flickr | McCrindle Research Social Media Pinterest | McCrindle Research Social Media Google Plus | McCrindle Research Social Media LinkedIn | McCrindle Research Social Media Mark McCrindle Slideshare


Last 150 Articles


Tags

housing emerging trends growth researcher relational etiquette vegetarian mccrindle in the media winter Merry Christmas social change visual the hills interactive conference speaker 2020 jobs of the future Australian communities tattoos media release PSI public holiday builders investing program travel sector wide average aussie investment insight dare to dream learning styles optus my business awards shbc education research retirement bus Canberra baby name predictions not for profit unemployment rich GPO narcissism Geoff Brailey commute fresh outsourcing education Aussies social research data visualisation gen z cloudy days medicine Generation Y children suburb priorities Australian schools manly learner leadership business in the media futurist Australian Dream father's day google video deloitte relevant population growth social researcher thought leadership JOMO Northern Beaches young people internships newspaper the australian dream pyrmont sydneycity lifestyle post rationalism healthy future supply and demand #censusfail logan social researchers participants community networking shifts apartment thrive Adelaide budget consumer Sydney census results professional services speakers future of work long weekend generations group session rise of local NEETs financial future names stats market research australian communities forum students Australian Communities Trends data analyst communication goals transport the changing face of religion wealth distribution Mark McCrindle mccrindle wolloomooloo happiness year 7 rising house prices entrepreneur generation sydney event baby boom research data clothing Christmas season SMSF hills shire school students ageing ipswich kate middleton daily commute spend small business snapshot family dreaming schools The Daily Edition teacher meetings future-proof ageing population faux-cilise financial dreams eliane miles Wellington divorce rate Love aged care Australians New South Wales SA the average aussie princess charlotte trends typical australian middle class cancelling plans parenting life 10 years Financial Planning Week January 26th income Education Future Forum world youth day follow home australian communities trends report shopping workshop sunny days digital sydneysiders award teaching communicate moderators guide cancelling event 40 million conference Sydney keynote speaker divorce nfp tv future proofing generation alpha aged care puzzle meals debate low density holiday dessert global generations IT Specialists plans rent pharmacies survey design community engagement Wagga Wagga real residents balance annual income summer millenials hobart winter blues panel Western Australia australians staying home more child care debt tips census Northern Territory house price rise REIV National Conference marrickville offenders social commentary mythbusting curiosity local communities buildings millionth Christmas lunch townhouses travelling learning infographic criminal earn workplace 2014 Australian Home going out Assistant Store Manager national wealth Hornsby Shire Council megatrends gen alpha car trends of 2016 Bathburst Aussie group Engineering Manager cartodb Australian Bureau of Statistics norwest wage Res Vis cars weather New Zeland social lives city REIV Conference train education future report presentation earnings high density living event ashley mckenzie New Zealand ABS VIC EFF leadership workshop litter community event faux-ciliser poker master Myth year 12 staff organisational culture renter of the future quote coffee financial environment case study education future mover and shaker Population Clock FOMO holidays collaborative new office engage property equip future research sydney metro baby name safe identity Births Netflix overcast Queensland: QLD brisbane study Do It Yourself tuesday cooking house price google for education gender Word Up global gold coast darwin 2013 crime focus group financial fears social commentator experience Valentine’s Day resource household society living learn entrepreneurial Tuesday Trends government royal influence shopper's pick menai internship Territory online not-for-profit university degree McCrindle Speakers System's Architect seasons bondi mccrindle tea high density apartments mining boom Research Executive Northern Beaches Christian School social analysis Real Estate forecasting housing trends graphs affordability food home ownership state Northern beaches Event ferry DESTEL Australia Day Australian Census economic mother's day conference presentation authenticity world neutral bay optimistic 1994 Christchurch 23 million waverton office opening goal HSC slideshare public speaker analysis Caregiver resilience teleworking renting friends emerging generations motivate paying to work define keynote speaker national crime rates mateship media commentary new york times public speaking capital city career sunburnt country national private wealth South Australia sustainable proactive office space workplace culture vegemite owning a home ethnography media WA ideas property price presentations future of education royal family high density poor engagement work mates sector wide study cost demographic trends land of the middle class research pack story ACF 2016 housing market social shifts social trends house NT states suburban living Queensland tea greatness change couple marriage culture data house prices organisations forum publication CBD australia Royals volunteers potts point personal growth click ease of travel technology skills men social issues hornsby responsive daily telegraph statistics 2016 easy rider sun Gen Y woolworths business index parents perth know the times 24 million educhat housing growth lalor park cost of living work friendship storytelling demographer trends analyst ACF Tasmania social social life student domestic forecast office results baby name trends christianity product sports global financial crisis alpha 24,000,000 changing face of sydney online shopping professional speaker acf15 victoria selfie commuters work-life insights marriages university youth unemployment hello fresh award winner urban taskforce jobs Deaths investor twentyseventeen 2017 weekly earnings easter financial independence increasing densification omnibus australian social research research services millennials school Real Estate Institute of Victoria social impact future proof grandparents 1975 employers fears blaxland challenge visualisation Gen X growing population energy area trends of 2017 salary urban living Financial Planning Association Melbourne cultural diversity English careers qualitative research brand experience Australian Trends Wodonga TDE sydney speaker Australian demographics brand Scouts urban living index Kiwi education sector earning the hills shire Social Trend ACT aussie culture ashley fell bureau urban toys emerging technologies infographic wall conferences environmental scanning young australians staying in families communities Kirsten Brewer finance dream pharmacy facts huffington post celebration 2016 census results research visualisation high school home owner innovative mentor language FPA educated entrepreneurs of today anzac intern monarchy faux-cilising social media list Financial Planning Association of Australia baby village crows nest report prince george 2015 rule keeper leader brands wealth christmas trend tuesday trend culturally diverse media activity population Australia Day 2017 suburbs Channel Seven generational trends optus rain eliane generation Z demographic transformations baby boomers Christmas presents mccrindle research society trends demographic schools students NSW communications The ABC of XYZ population milestone events 2012 school satisfaction property market housing affordability 2016 census TAS politics mythbusters tertiary education recap sydney hills geomapping cancel plans population map keynote cash training rental stress workforce local moreton bay wealth and income DIY employment unaffordable survey ultimo sentiments wellbeing wealth and income distribution consumerism Generation X cold hopes 1968 economy mobile royal non profit "know the times" charity royal baby teachers socialising customer Tuesday Trend church affordable tableau capital cities mortgage water women news Channel 7 collaboration internet demographics focus groups households socialites teach Australian Families stay home census 2016 social enquiry 1980 sector professional development wedding wages Duchess of Cambridge Crime Rates in depth interviews youth christian census fail repayments professional World Water Day marketing contiki February 16 entertainment innovation Charlotte personalities baby names

Archive