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


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