{"id":41295,"date":"2022-12-24T09:50:06","date_gmt":"2022-12-23T20:50:06","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=41295"},"modified":"2022-12-24T09:50:06","modified_gmt":"2022-12-23T20:50:06","slug":"vb-stat-proves-house-prices-are-cooked","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/vb-stat-proves-house-prices-are-cooked\/","title":{"rendered":"VB stat proves house prices are cooked"},"content":{"rendered":"

PHOTO: It\u2019s not like the price of beer has stood still, either. A slab costs a lot more than it did. FILE<\/strong><\/p>\n

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House prices have been rising faster than almost everything else.<\/p>\n<\/div>\n

When you put money towards\u00a0buying a house, it means you can\u2019t use that money for other things. So what do we give up when we buy a house? And has it changed over time?<\/p>\n

\"Constables<\/a><\/div>\n
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Queensland police to buy property where cops gunned down<\/a><\/h2>\n<\/header>\n<\/div>\n

Usually economists like to put houses in terms of wages, and we all know that has gone up. But let\u2019s do something different. Let\u2019s put the price of a house in terms of some classic Aussie items. Like VB.<\/p>\n

A\u00a0house\u00a0used to cost the same as 6000 slabs of VB in the 1980s<\/strong>, so buying a house meant giving up buying 6000 slabs of VB. That\u2019s a six-pack every day for 65 years! That might seem like a lot of beer, but what you give up now is even more: a house costs the same as 16,000 slabs of VB!<\/strong><\/p>\n

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You need 16,000 slabs of VB to afford a house these days. Photographer: Carla Gottgens\/Bloomberg via Getty Images<\/strong><\/em><\/div>\n

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It\u2019s not like the\u00a0price of beer\u00a0has stood still, either. A slab costs a lot more than it did. Once upon a time you could hope to buy beer for around a dollar a bottle. The reason the above graph slopes up is house prices are rising even faster than beer prices.<\/p>\n

They\u2019ve risen about 2.5 times faster.<\/p>\n

Notice at the end of the chart, the line goes down? That\u2019s because in 2022\u00a0house prices\u00a0are finally relenting, but beer prices are still rising. When the price of beer rises faster than the price of a house, the line goes down.<\/p>\n

\"Kendra<\/a><\/div>\n
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How to watch Kendra Sells Hollywood in Australia | WATCH<\/a><\/h2>\n<\/header>\n<\/div>\n

House price falls are expected to continue next year, so unless beer gets cheaper too, the lager-to-land ratio could get even lower!<\/p>\n

(Reminder: we are just looking at raw house prices, not the cost of servicing a mortgage).<\/p>\n

Sand and sun vs. bricks and mortar<\/b><\/span><\/p>\n

We can look at house prices in terms of another classic Aussie purchase too: a trip to Bali.<\/p>\n

The price of a house used to be 200 trips to Bali, but\u00a0going to Bali<\/a>\u00a0has stayed pretty cheap over time, and buying a house has got a lot dearer.<\/p>\n

So now, when you buy that house, you give up an awful lot of holidays: 800! (not that anyone could take 800 holidays to Bali in their lifetime, any more than they could drink 16,000 slabs)*.<\/p>\n

It just illustrates how BIG a house purchase really is).<\/p>\n

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That\u2019s what we mean when we say something is expensive: buying it forces you to give up buying a lot of other things.<\/p>\n

If you saved for a house deposit in the 1980s, you probably never took an international holiday. These days, many are tempted.<\/p>\n

The reason is clear: a trip to Bali used to wipe off a big chunk of your house deposit. But now? What it wipes off is a much smaller chunk \u2013 four times smaller. Taking that holiday isn\u2019t going to make such a big dent as it used to.<\/p>\n

Is there anything rising faster than house prices?<\/b><\/span><\/p>\n

Yep. One thing. Tobacco. The price of a pack of smokes has gone up faster than anything else in the Australian economy, thanks to really big tax increases. What that means is that the trade-off between a house and a pack of smokes has gone the other way to everything else.<\/p>\n

The number of cigarettes you\u2019d have to trade for a house is now lower, not higher.<\/p>\n

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When you buy a house you forego 16,000 packs of cigarettes. It used to be 50,000. Every cigarette is a punching a bigger hole in your ability to buy a house than it used to!<\/p>\n

This is probably why your grandparents smoked when they were saving for a house. In fact, smoking back then is a bit like going to Bali now: not exactly frugal, but cheap enough that it doesn\u2019t have to make a huge difference to your overall budget.<\/p>\n

READ MORE VIA NEWSHUB<\/a><\/p>\n

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