Free university. Affordable bills and housing. The baby boomer generation came of age in an Australia that sounds impossibly carefree to today’s thirty-somethings.
Today’s 30-34 year-olds are the first generation in more than 47 years where most people don’t own a house.
In the 1990s, recession pushed interest rates to 17 per cent. Despite the steep repayments, most 30-somethings were able to purchase a home.
When it comes to housing affordability, Greg Jericho, chief economist at the Australia Institute, says today’s cohort has it worse than those in recession because property costs have surged past incomes.
“The reality is that the cost of the loans was much smaller, because house prices were much lower, but also relative to what they were earning, it was much lower,” Mr Jericho says.
“It’s not about comparing interest rate with interest rate.”
In 1990, the average mortgage was about three times the yearly wage for a 34-year-old. Now it’s eight times.
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