As if losing two years of our youth to a global pandemic and emerging into a teetering economy wasn’t enough, a new report by Data Researcher Mccrindle has painted a bleak picture for the current housing market, especially for young people.
According to the report, housing prices have increased enormously in every major city around Australia since 1981. In inner-city Melbourne, the increase has seen the average house skyrocket from $44,000 to a blistering $962,250 over the last 40 years. That’s a whopping 22-fold difference. More startling, the average wage has only multiplied six times in that same period.
Though it’s not surprising that housing prices have been slowly increasing over the past few decades — swallowing the bitter pill through ever-relatable memes and stark news reports — the ever growing gap between wages and housing prices is yet another knife in the back. Which begs the question: How the hell are we meant to make enough money to afford this?
To get a better understanding of the issue at hand, we asked others caught in the whirlwind of the housing crisis to dish out their opinions on the future of the rocky world that is property ownership.
VICE: Are you looking to own a house in the future? If so, when?
Ben, 24-years-old: I’m looking to own a house...I suppose that’ll have to be whenever I can afford one.
Nina, 24-years-old: I would like to, but I don’t think I’m ever going to have enough money to buy a house, so I don't think I’ll own a house until I probably inherit my parent’s.
Jack, 25-years-old: I don’t think so. I just graduated from a Bachelor of Communications in Media this year, and the creative industries have been so thrown around by COVID. I interviewed a number of people working in creative industries for one of my final assignments and they all said they are looking for a plan B career-wise, or have been forced to take on multiple jobs, many in hospitality, to support themselves. It’s so unstable right now. So, saving for a house isn’t really on my mind.
Erik, 17-years-old: I’m actually looking to move out in my gap year with my best friend as they are buying a house. The plan is that I pay for the room, half the utilities and groceries. They have $400,000 from an inheritance from their grandparents, and even that’s not enough for a 2-bedroom stand-alone unit, so we will have to get a loan.
Andrew, 26-years-old: Yeah, I’d love to own a house. I’m actively in the process of saving up for a deposit now - not with any actual plan in mind, more just with an understanding that if I don’t put money away I’ll be caught out.
In the last 40 years the price of housing in Melbourne inner city has grown 21 times over, while wages have only grown 6 times higher. The gap between housing and wages is definitely growing. Does this surprise you?
Ben, 24-years-old: It doesn’t surprise me at all. The baby boomers climbed the ladder and kicked it out from beneath them. I’ve known this for a while.
Nina, 24-years-old: Mmm, that fact doesn’t surprise me because I know that that’s the reality. I know that our parents, when they were our age, were more likely to be able to have a house. It doesn’t surprise me but I’m a little shocked and disappointed that the average income hasn’t increased.
Jack, 25-years-old: It should surprise me, because shelter is a basic human necessity, but it doesn’t surprise me at all because of just how fundamentally exploitative the system is. I was listening to a podcast where they comment on the fact that we still refer to landlords as ‘lords’. It’s just a total piss-take. Things haven’t changed all that much from the medieval European feudal system, it’s just more distorted.
Erik, 17-years-old: I am not surprised with how the prices have risen astronomically. This world is made for the rich. Land on its own is ridiculous, let alone the actual house. The housing market is capitalism at its finest.
Andrew, 26-years-old: It surprises me in the sense that I can’t believe that we live in a society where we’ve allowed a change like that to happen over such a short period of time. But I’m not shocked at the numbers. Ultimately, it’s a real indictment on the people who have been in power over the last four decades that there hasn’t been any kind of reflexive political action on housing.
Do you think you’ll ever be able to afford a house?
Ben, 24-years-old : In Melbourne? I'd say the chances are low.
Nina, 24-years-old: No.
Jack, 25-years-old: No. However, I am in the very fortunate position to have parents who own their house. My parents are lucky they bought when they did, as a month after they bought they never would have been able to afford a house in that area. I suppose my brother and I can hope to inherit that place one day. If this were not the case, the best I could hope for would be a commune of sorts – which in actual fact sounds idyllic and would be something we would consider utilising our property for in later years.
Erik, 17-years-old: I don't think I'll be able to buy a house when I'm older. Not on my own. With the career I want to pursue – selling books and art, as well as working at a small cafe full-time – I could not even have a small apartment.
Andrew, 26-years-old: The house I’m currently living in – an extremely old building, miles from any public transport links or meaningful points of interest, generally on the verge of falling apart – is valued in the range of $940,000 to $1.2 million dollars. What that means is that even if me and my partner went in on the house together, and we saved up aggressively for the minimum $100,000 deposit that we’d need – which would take us years if not decades to save regardless – we would struggle to qualify for that mortgage on the basis of our income. Like... There’s just no way.
What do you think you’d need to do to be able to afford a house?
Ben, 24-years-old: Become solvent and win the lottery.
Nina, 24-years-old: Probably change lifestyle. Pursue a career that’s very high paid. This is why there’s such a discrepancy between the rich and the poor.
Jack, 25-years-old: The friends I have who are currently looking to become homeowners either come from money or have sacrificed a great deal to be in the position they are in – working jobs they don’t enjoy that often don’t align with their values. It seems to be a trade off that a lot of young people face. It’s like: Will you sacrifice many important experiences in youth to live comfortably in your old age?
Erik, 17-years-old: I would need to have a full-time job and have to live with someone else no matter what; partner, best friend. My parents would need to help me out, too, for the first few years. They are very understanding of how hard it will be for me and my siblings to support ourselves in this climate of rising home prices.
Andrew, 26-years-old: I think at the moment there are basically two options for anyone in Melbourne realistically wanting to buy in their early 20s: either try to buy a tiny, tiny, tiny apartment somewhere in a big city, or move to the country for a bit and maybe get an actual house. Which like... those are not unreasonable moves. But they’re not great either.