Baby boomers had it a lot easier than the more youthful generations buying a house - regardless of having to pay exorbitantly high interest rates.

The generation born after the war were hit with massive 18 per cent rate of interest back in the late 1980s.

Those payments were crippling, when they were maturing in the seventies and eighties, however homes were significantly cheaper compared with normal incomes.

That was likewise back when Australia's population was almost half of what it is today, long before annual immigration levels skyrocketed.

Baby boomer financial expert Saul Eslake bought his first home in Melbourne's St Kilda East for $105,000 in 1984 on a $35,000 salary when he was 26, after benefiting from totally free university education.

With an $80,000 mortgage, he was obtaining little bit more than double his pay before tax and strikes out at any recommendation his boomer generation did it harder - regardless of the high rates of interest he paid.

'I paid eighteen-and-a-half per cent for a few of that however my first house expense $105,000 and it took me less than three years to conserve up the deposit,' he told Daily Mail Australia.

'Despite the fact that rates of interest are less than half what I was paying, it was nowhere near as tough as now and I didn't have HECS debt to settle since I was part of that lucky generation when it was free.

The generation born after the war were struck with enormous 18 percent rate of interest back in the late 1980s (pictured is Terrigal on the NSW Central Coast)
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'My generation had it pretty easy - we got free education, we got housing really inexpensively and we have made a motza out of the increase in house costs that we have elected.'

In 1980, Sydney's mid-point priced home expense $65,000, or just 4.5 times the average, full-time male wage in an era when a woman would have a hard time to get a mortgage without a signature from her other half.

Property information group PropTrack approximated Sydney's median house would cost $338,000 today, or simply 4.3 times the typical salary now for all Australian employees, if home costs had actually increased at the exact same pace as earnings during the past 45 years.

In 2025, Sydney's middle-priced home expenses $1.47 million or 14.3 times the average, full-time wage of $103,000.
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But that price-to-income ratio rises to 18.7 if it's based upon the typical income of $78,567 for all workers.

AMP deputy chief economic expert Diana Mousina, a Millennial, said the more youthful generations were having a harder time now conserving up for 20 percent mortgage deposit simply to purchase a home.

'The problem now is simply entering the marketplace - that's what takes the bigger chunk of attempting to conserve; it takes 11 years to save,' she stated.

Property information group PropTrack estimated Sydney's median home would cost $338,000 today, or just 4.3 times the average salary now for all Australian workers, if house rates had increased at the same speed as wages throughout the past 45 years

Boomers fought with sky high interest rates in the 80s - they have not been that high considering that - but they had it simpler since house rates were far more budget friendly

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Melbourne's mid-point house rate cost simply $40,000 in 1980 or 2.8 times the typical male salary.

If cost had remained continuous, a typical Melbourne would now cost just $205,400.

But the Victorian capital's average home price of $850,000 is now 10.8 times the average wage for all workers.

Brisbane's typical house rate cost $32,750 in 1980 or simply 2.2 times what an average man made.

That would be $174,600 today if purchasing power hadn't changed.

Queensland capital houses now cost $910,000 or 11.6 times the average salary.

The major banks are unlikely to lend somebody more than 5 times their pay before tax, which indicates numerous couples would now struggle to get a loan for a capital city house unless they transferred to a far, outer residential area and had a huge deposit.

Housing price weakened following the introduction of the 50 per cent capital gains tax discount in 1999, simply before annual immigration levels tripled during the 2000s.

'Since about 2000, you've seen home costs relative to earnings rise at a substantial quantity - it's been the reality that we have actually been running high levels of population development - so migration, so more demand for housing,' Ms Mousina stated.

Baby boomer economic expert Saul Eslake bought his first home in Melbourne's East Kilda for $105,000 in 1984 on a $35,000 income when he was 26, after benefiting from free university education

'We have actually been running high migration targets, at the same time we haven't been constructing enough homes throughout the country.

'We do have quite favourable investment concessions for housing, consisting of unfavorable gearing, capital gains tax concession.'

Mr Eslake stated political leaders from both sides of politics wanted house prices to increase, due to the fact that more voters were home owners than occupants trying to get into the marketplace.

'For all the crocodile tears the political leaders shed about the troubles dealing with potential first home purchasers, they know that in any given year, there's just 110,000 of them,' he said.

'Even if you presume that for everybody who prospers, in ending up being a very first home purchaser, there are five or 6 who would like to but can't - that's at most around 750,000 elect policies that would limit the rate at which house prices increase.

'Whereas the political leaders understand that at any moment, there are at least 11million Australians who own their own home; there are 2.5 million Australians who own a minimum of one financial investment residential or commercial property.

'Even the dumbest of our political leaders - as the Americans say, "Do that math" which is why at every election, politicians on both sides of the divide - while bewailing the problems dealt with by first-home buyers - pledge and implement policies that make it worse because they know that a large bulk of the Australian population do not want the problem to be fixed.'

Sydney was the first market to become seriously unaffordable as Australia's most costly urbane housing market.

PropTrack estimated Sydney's typical home would cost $338,000 today, or simply 4.3 times the average income now for all Australian employees, if home rates had increased at the exact same pace as earnings during the past 45 years (pictured is an auction at Homebush in the city's west)

Australians warned to get ready for a substantial 'costs explosion'

In 1990, the typical Sydney home cost $187,500 or $447,300 now if affordability had stayed consistent.

A years later on 2000, quickly after the introduction of the 50 per cent tax discount, a common Sydney home cost $284,950.

That would equate into $544,000 today if price had actually remained consistent.

This would likewise be the point where a single, average-income earner might still get a loan at a stretch with a 20 percent mortgage deposit.

By 2010, Sydney's median house expense $600,000 or nine times the average, full-time salary, putting a home with a yard beyond the reach of an average-income earner buying by themselves.

In addition, the housing price crisis has intensified as Australia's population has climbed from 14.5 million in 1980 to 27.3 million now.

During the 2000s, yearly net overseas migration doubled from 111,441 at the start of the decade to 315,700 by 2008 when the mining boom was driving population growth.

After Australia was closed throughout Covid, migration soared to a new record high of 548,800 in 2023, leading to house costs climbing up even as the Reserve Bank was setting up interest rates.

When it concerned the stereotype of youths squandering their cash on smashed avocado breakfasts instead of conserving for a house deposit, Mr Eslake had a basic response to that.

'At the extremely least, a highly noticeable rolling of the eyeballs,' he said.

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