Ultimately this is just another load of misguided and misrepresentative crap, no different another recent thread regarding housing affordability.

The purchase price : income ratio is no guide to “affordability”

Affordability is only determinable after the interest cost is included,

because

the vast majority of houses are purchased using borrowed money in the form of an interest bearing mortgage

and

at an average rate of 10% interest pa, a 30 year constant repayment loan (the usual sort) the interest burden will represent 68.3% of total all repayments

or even

at an average rate of 6% interest pa, a 30 year constant repayment loan (the usual sort) the interest burden will represent 53.5% of total of all repayments

pretending that, for some reason, the ratio between a median house price to the buyers income is the only factor to be considered in "affordability" is the deceptive product of either spindoctor cynicism or moronic stupidity

either way, neither is a justification for perpetrating a lie

further, whilst banks continue to lend on the basis of around 50% of after tax income or 30% pretax income (as has been their practice for decades, with no indication of future change), the notion that there will be a difference, over time between housing affordability for the next generation from the current is complete and utter garbage.

Prices of housing go up and down, in response, not just to household incomes nut also because of interest rates, which keep “affordability” as more a constant than the "variable", which is hypothesized here.

The data sources here are also doubtful.

I lived just outside the DFW metropolis in 1999-2001, the population was over 10 million, not the 5.5 million used in this blatant exercise in emotional puerility.

Another factor everyone must consider is

the US has a recent history of “jingle mail” which has depressed recent housing prices and caused a financial crisis.

The influence of such laws, which were not been enacted in Australia do influence international comparisons, especially price trends over time, between Australia and USA,

further invalidating the simplistic assertions of the article.

At the risk of sounding nostalgic, when we bought our first home way back in the late 20th Century, we were lucky enough to have saved enough to buy a new one.
It was an 11-square uncarpeted spec-built Hardiplank cottage in the middle of a sea of mud. No garage or even a clothesline, we baked through the summers and froze through the winters.

Now I see young couples buying new brick houses as their first home - fully landscaped, air conditioned, double garage and with "nothing to spend".

That's where the crippling debt burden starts.

Although nobody builds the cheaper alternative any more, living beyond your means - no matter how attractively the idea is marketed - is still a personal choice.

It's a creditable aspiration but the notion of home ownership has never been "a right" in any society.

wobbles,

I must admit, i am sick and tired of hearing "we lived in a 2ft by 3ft home back in my day" and "it had a straw roof"...geez cmon. I am a gen y and am ashamed of what the housing industry has become, the reason us "youngies" live in these big brick homes is because a 30 yr old brick may only be 20,000 more affordable and; im quite sure we would like to put a $30,0000 barn shed on a block in suburbia (to get into the market) but we simply arent allowed to (government/developer restriction). So. if we want our first home ever, we are forced to buy a ridiculously overpriced block and a home that "fits in " ......its all bull and will certainly lead to social problems.

I will not lock myself into a 400+ p/w mortgage for 30+ yrs, the baby boomers didnt have to so why should I?

The truth is Wobbles and whoever else reads this is that the younger generations (majority anyway) dont want it all, all we want is a place to call our own, to paint, to do the gardening and to hang pictures on a wall. thats all, but it is made impossible.

Thats all i have to say.