Part of the bigger problem is the continued artificial increase in house prices. It is ridiculous that house prices should continually increase, even when other investments globally are getting crushed. You can't in all honesty say houses are worth what people are paying for them.
Rationalise house prices and prices of goods and services will rationalise. To do this you have to remove the obsession people have with "owning their own slice of australia". This mentality is a damaging yolk on food prices, car prices, and general retail prices. Australia is one of the few nations in the world that indexes the number of housing loans in to GDP. Remove this inclusion, let house prices fall to a reasonable level (maybe half to a third of current prices) and general economy prices will do likewise.
Sorry to all the real estate lovers out there who fawn over renovation shows, collect glossy home improvement mags and spend BBQ conversations mulling the awesomeness of their property accumulation plan with other similarly obsessed folk.
It is you guys that are driving up house prices because you are not willing to accept losses on property that keep retail prices at artificially high prices.
as an example. I am currently living as an expat in communist central asia. The govt owns and controls everything. There is no credit card network, no import network, black market rates for everything. Yet I can still buy australian made products and particulalry foods here (when they are available) for about a tenth of the price youpay in australia. same as wine.
So are aussies being ripped off? Yes. Why? because people need to pay off stupidly inflated housing loans for insane amounts and to do this they need high wages.
