House price growth three times faster than wages over four decades   

November 7, 2021
Sydney Morning Herald

The price of a typical house in Sydney has multiplied by 17 times in the past 40 years, almost three times faster than wages.

Analysis by social research firm McCrindle revealed that wage growth has failed to keep pace with the housing boom across all Australian capital cities.

Melbourne property prices increased the most since 1981, while Sydney has remained the most expensive housing market overall.

Alexandra Samootin saved money for a house deposit and owned a home with her then-husband, but wound up homeless in later life.


Founder Mark McCrindle said the rise in two-income households had boosted relative borrowing power for some families, but this also widened the social divide.

“It is meaningful to look at the increase in the earnings-to-housing ratio because while some are able to combine two incomes, others get the Bank of Mum and Dad involved, and others might have access to other resources, it’s certainly not the case for all,” he said.

“Assuming someone has one income to work with, it does mean that the access to housing [ownership] is not as universal as once it was and so it might still be an Aussie dream, but it’s only achievable for some.”


The report, titled The Fading Australian Dream, combines current and historical figures from the Australian Bureau of Statistics, property analytics firm CoreLogic, and economist Peter Abelson.

The median house price in Sydney in 1981 was $78,900, five times the national full-time average annual earnings of $15,800. In 2021, the city’s median house price was $1.31 million, 14 times the average income.



Sydney unit prices have risen from a median $67,300 in 1981 to $824,860 in 2021 - an increase from 4.3 times to 8.8 times average earnings.

Average full-time earnings are now $93,500 - 5.9 times what they were in 1981. However, Sydney house prices are 16.6 times higher and unit prices are 13.2 times higher.

Melbourne’s property market grew the most, with the median house price 21.9 times higher than in 1981 and the median unit price 17 times higher.

In 1981 in Brisbane it was cheaper to buy a house than a unit. Mr McCrindle said this was an anomaly caused by the fact that luxury apartments in the city were virtually the only units in Brisbane at the time.

Mr McCrindle said the same trends would also apply to the rental market.

“House prices are a proxy for rents so as the house prices go up, so do the rents,” he said. “The other thing with a property price growth market, like we currently have, is that you have people who have been happy as landlords just having their place rented out, suddenly selling because the prices are too good to be true, and this is creating some shortfalls.”

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Joel Pringle, the advocacy manager at the Benevolent Society working on the EveryAge counts campaign against ageism, said the insecurity and expense of the private rental market was a big cause of homelessness.

“High rents have a big impact on people who have had insecure housing over a long time,” Mr Pringle said. “Housing costs are a huge part of homelessness but also unexpected life events like relationship breakdown or losing a job.”

This was the case for Alexandra Samootin, 78, who spent three months in a women’s refuge a bit over a decade ago and now lives in public housing in Dee Why.

Ms Samootin owned a family home in Mona Vale with her husband of 22 years but, after her divorce and unexpected legal problems, she was left bankrupt in later life.

“I still consider myself homeless because I’d never live in this type of unit,” she said. “I can’t have the grandkids here.”

Ms Samootin said she saved enough for a home deposit working as a secretary by the time she was married at 28, but she feels sorry for young people today who “would need to be on a terrifically high income” to do the same.   

People over 55, especially women, were one of the fastest-growing groups of homeless people in the 2016 census, and people aged 55 to 64 are one of the biggest cohorts on unemployment benefits.

The EveryAGE Counts campaign is advocating for NSW to adopt the Home at Last program running in Victoria, which provides advice, support and advocacy for older people who are homeless or at risk.

Which is why super is crap and why property is the only way forward in prepping for retirement.

Property provides you with shelter AND a steady income stream.