,

Time machine to Property Investment in 1973

If you only had a time machine and could go back to 1973 and get a property investment on your Bankcard!

(The year I was in grade two and my family went on its first “Fairstar” cruise, oh and the Sydney Opera House was opened)

Fairstar-07

Most people know that the price and value of property grows over time.

That’s why it’s said the best time to get into real estate was yesterday, today and tomorrow.   The quicker you start, pretty much regardless of market conditions, the better off you’ll end up.

Median house prices across Australia’s capital cities in 1973 looked like this:

  • Sydney – $27,400, rent $26 per week
  • Melbourne – $19,800, rent $19 per week
  • Brisbane – $17,500, rent $17 per week
  • Adelaide – $16,250, rent $15 per week
  • Perth – $18,850, rent $18 per week
  • Canberra – $26,850, rent $26 per week
  • Hobart – $15,200, rent $14 per week

350318_large

A lot of people would be able to put a house in any of those cities on the credit cards these days at those prices!

If those were the prices today 90% of people in Perth could pay for a house with last week’s overtime!  LOL

Things are very different these days.   Domain Group’s House Price Report September 2014 says:

  • Sydney – $843,994
  • Melbourne – $615,068
  • Brisbane – $473,924
  • Adelaide – $459,258
  • Perth – $604,822
  • Canberra – $573,326
  • Hobart – $322,274

The average weekly wage in 1973 was $111.80 (including full- and part-time workers), according to the Australian Bureau of Statistics (ABS).

1973_50_dollars_big

The standard variable interest rate in 1973 was around 7.5% so your repayments on a Sydney house would be $39.51 a week or around 35% of your weekly wage (presuming you’d borrowed 100% and paid interest only which of course back then, you couldn’t – you needed a 25% deposit minimum to get started and capital + interest was the only thing allowed).

home_beautiful_magazine_april_1973_stem_chair_featherson

Today, a full-time worker makes on average $1453.90 weekly (before tax).   Today the standard variable interest rate is around 4.5% so the same payment would be 49% of your weekly wage!

Of course we know that people don’t just walk out and buy a $850k house as their first property investment but you get the idea.

Property prices are going up, up, up and there is no real economic reason in Australia for them to come down.

With international pressures, more and more imports and a rising deficit there’s probably room for more volatility in prices in Australia.

In the past property prices would tend to go up followed by a period of flat or no growth but in general prices would not go down.  The 2008 GFC ended that trend with property prices in most capitals dipping by up to 30% and in some areas (like the Gold Coast) huge drops were recorded.

So the days of perfectly “safe” property investing are over, but over the long term, with the right property, the outlook is still favourable no matter how high prices are now.

 

 

You might also like…

Sydney Property Boom Rolls On

Investment Property – What to Buy

Starting Property Investing with $9,000

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Written by Peter Spann

Peter Spann – Film Maker | Director | Business Coach | Writer | Public Speaking Coach | Presenter | Investor.

© Copyright: 2015 Peter Spann – All rights reserved

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *