Certainly recent first home buyers, or aspiring first home buyers, are far worse off than when the Howard Government was elected (though this is not necessarily due to the Howard Government). For example, in Melbourne in 1996, the average Melbourne household was earning $61,800 and the median price for a house was $132,500. Now, Housing Industry Association figures show average household earnings are up 50 per cent to $93,400 - but the median house price has more than tripled to $418,600.

As a result, younger Australians are required to pay a far higher proportion of their lifetime's earnings on basic housing than previous generations, which in effect means that they start their working lives hundreds of thousands of dollars financially worse-off than their parents were at the same stage of life (not to mention the high HECS debts they also now have to repay)

Leith,

Your observations are generally spot-on except that the Howard Govt. had a major role to play in driving the speculative boom in residential property prices.

The RBA believes that deregulated lending is a major factor. Internationally others thers have cited central banks for slashing interest rates in the early 2000’s and both of those suggestions are correct to a degree

However the 1999 capital gains tax changes triggered an exponential increase in borrowing for housing investment & property prices as our unique negative-gearing laws allowed certain investors to minimise their rental income losses while the 50 per cent capital gains tax discount increased net gains .

The combination of these two factors - timed to coincide with 'record low interest rates (as they were) has fuelled the phenomenal increase in house prices and household debt

- Mr Smith