Average is different to median, and the average of the middle wealth section is different again.
If you are going to compare wealth with property it needs to be the actual median of both.
Or.... the average of both, but as median is more commonly used it makes it easier. Both have their flaws.
The median is the biggest bulge in the curve of wealth. There are more people in the middle than at the top and bottom ends.
Median wealth people are buying median properties all the time.
As you say people build wealth over time.
As they build this wealth they like to improve their lifestyle. So maybe they started with an apartment or a house in the outer areas. But as their wealth grows and their stage of life changes they want a freestanding house in the inner ring, close to good schools, amenities and work. So they sell their previous property and go into the market for a median priced home.
Remember we are talking abut median house price here so in Sydney about $1.2m. We are not talking about Paddington or Mosman.
So with the largest part of the wealth bulge wanting to purchase their dream home, how could it be possible that a first home buyer would be in a position to purchase a median priced home. They are out gunned.
Go to any auction for these types of properties in Sydney, look who is buying. They are not first home buyers.
Think about it.
Does it not make sense that people with high wealth buy expensive properties, low wealth buy cheap properties and median wealth buy median properties????? Maybe I am missing something... seems simple to me.
"Most who takes out a $1M mortgage don't have the equivalent $1M in gold, silver, stocks and bonds... do they?"
Of course not. If they had $1m in assets why would they take out a mortgage at all?
