I thought the arguments and reasoning in this Fairfax Press article, on high property prices and how young people are struggling to buy a home, quite sound until I reached almost the end and this single sentence caused some steam to emit from my ears.
Older generations who joined the housing party were able to take out large mortgages, safe in the knowledge that inflation would erode the real value of the loan, while wage gains would boost their ability to repay.
Believe me, when I managed to cobble together $5,000 in 1982, a couple of thousand first home buyers government grant, a few thousand borrowed on my credit card that I had to fudge figures for as it would not have been acceptable to the lender, a couple of thousand borrowed from R and a $30,000 loan from a building society (higher interest rate than a bank) to buy a $42,000 house, I was not safe with any knowledge that inflation would erode the value of the loan or wage gains would boost my ability to pay off the loan. I worked six days a week for a number of years before dropping back to six days every second week. I never felt any sort of financial security until about 1993. In a decade we had one modest holiday to New Zealand, the cost lessened by us having a third person with us, after which we vowed we would never travel so closely with a third person again.
The house had barely any hot water, clogged and rusted old pipes, non functioning Holland blinds, moth eaten carpet, a semi outside lav that was filthy in the worst possible way, broken sheets of fibro cement on the garage with heavy wooden doors that were nearly falling off, no roof insulation, a broken concrete driveway, a tiny fanless gas heater in the lounge room ....the list is very long. Over the years we worked very hard to turn it into a comfortable home, and we did.
Young people have my full sympathy and I do think it is harder than ever to get that start with the first property, but don't ever think it was easy for most of us and we certainly went without to make that start.