We’re A Nation Obsessed!

I went in to my local newsagent this morning and was browsing through the popular magazines on display. My attention was attracted to the number of magazines on wealth creation and in particular wealth creation through real estate.

Magazines with headlines such as “Cool Market..Hot Profits”, “How I spent $30,000 and made over $120,000 in just One Month!”. You know the ones, you can hardly miss them when you visit any typical suburban newsagent these days.

Whether such headlines reveal the truth or are just typical hype, who knows? The fact is there is obviously a demand for these magazines, the implication being that anyone can get rich in a matter of months without doing any work or using any of their own money or savings simply by investing in real estate.

While it may be possible for certain people under certain circumstances to strike it lucky once in a while, it is certainly not the norm. In my 25 plus years working in the real estate industry I have seen more people lose money in real estate than make the proverbial ‘$120,000 in one month’ or such similar pie in the sky numbers.

This brings us to the point of the headline, ‘We’re a Nation Obsessed’.

Obsessed by what? You may well ask …

In a nutshell – HOUSE PRICES

If we are to believe the typical hype in the newspapers and electronic media, the price of houses is the most important thing in the world for most people.

What happened to the idea that houses provide one of the essentials of life, namely shelter, regardless of the value of the house. If we were a truely egalitarian society wouldn’t we want houses to be more affordable, both in terms of renting and purchasing so more people could participate in home ownership?

A generation ago it took 3.5 to 4 times the average single wage to buy the average house. Today using the same criteria, and based on the average single wage of around $50,000, it now takes 9 times the average wage to buy the median priced home in Perth.

Now, I’m not an economist, but those numbers say to me that the median priced home is unaffordable to a person on the average wage. So much so that it now takes two wages to buy the average home. Apart from the financial aspects, there are also social consequences which haven’t fully played out yet, but will no doubt do so over the next generation or so.

We are fast becoming a nation of those who currently own property and those who can never affort to.

As a final thougt, how come we complain when the price of bananas goes through the roof, yet rejoice when house prices do the same? (no pun intented). Or, the day before we buy a house we pray the prices will collapse, but the day after we’ve bought, we can’t wait for prices to go up! Go figure.

I’d really be interested in your thoughts.

I’m interested in your thoughts so have your say….

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