Affordability for housing is Australia has completely deteriorated. In 1981, house prices in Australia were approximately 3x the average annual wage 4 decades later, it's around 10x or more (see graphic below).
Is this going to lead to a large wealth divide between the Haves and the Have Nots? Has the government contributed to this housing affordability crisis via unusually generous tax concessions, (such as negative gearing) which encourage investors to over-leverage as this strategy has worked over the past 40 years. Obviously there are multiple factors which have contributed to this global housing boom but has the RBA further fueled the problem by making irresponsible promises like "interest rates won't be raised until 2024".
According to DEMOGRAPHIA INTERNATIONAL HOUSING AFFORDABILITY (2021 EDITION), Australia has 5 cities classed within the least affordable category in the world and Sydney is ranked the 3rd least affordable city in the world.
Owning an actual home provides people with a sense of pride and freedom (as you're not at the mercy of a landlord). Is this great life achievement going to be out of reach for many young people and future generations (especially those who won't inherit property)? I'd love to everyone's thoughts on this topic as this property BOOM seems to have affected everyone (either positively or negatively).
