Computer prices down 8.1% per year … since 1984 The price Australian consumers pay for audio visual and computing products has fallen an average of 8.1% every year since 1984, according to the new AMP.NATSEM Income Report. The new report (PDF), titled Prices These Days – The cost of living in Australia, says audio visual and computing products are one tenth of their 1984 …
Bollocks. Electricity has gone through the roof over here - South Australia now has the most expensive electricity on the PLANET. Not only that, but housing prices have also exploded, to the point where a normal suburban home will set you back around half a million dollars. Rents have increased accordingly. Most working class people are now spending more than the recommended third of their income on housing because of the insane property prices in this country. and these increased costs have had a flow-on effect to everything else.
Basic foodstuffs have remained relatively stable, as have consumer electronics, although how I don't know, considering petrol, energy, housing and everything else have gone nuts over here.
Sure house prices have rocketed, but just look at those houses.
Average house sizes in Oz have gone from approx 150sqm (1500sq ft or so) to over 240sqm (2400 sqft) and the ponciness has increased too. Flashy expensive kitchens, bathrooms etc . Air conditioning was once sneered at as being upper class snobbery and is now considered a basic necessity.
Hardly and apples-to-apples comparison.
"Average house sizes in Oz have gone from approx 150sqm (1500sq ft or so) to over 240sqm (2400 sqft)"
That's true for the new McMansions getting built, but 1) plot sizes have halved since the 70s, so 2) most of those houses have no garden to speak of, the house goes practically to the fence line as a result.
My parents' place, which they bought in 1974, is around 160 sqm - but it's on a 1/4 acre block, and actually has a front and back yard. Just up the road from them is a 'new' estate (now about 10 years old) with an average block size of 1/8 acre. The effect is visually startling. My name for the new estate - Sardine City - reasonably conveys that visual impact.
Yet the valuation on my parents' house is around $430,000, and one of the McMansions near there recently sold for $480,000. So it's not house size that has much to do with the ludicrous prices mate. It's rank greed on the part of baby boomer property investors, the government, and real estate companies. A difference of 11% for a house three times the size IS an apples to apples comparison.
And the only reason that people can afford to remain housed is because interest rates are low. If/when the Reserve Bank decides that the economy requires the cash rate to go up to the sorts of rates seen for most of the 1990s, there are a lot of families that will be in serious trouble.
Of course, as some economists like to point out, it's not a housing bubble, because our population growth through immigration is driving real housing demand. A pity that it isn't driving adequate housing or infrastructure supply, or the establishment of another actual city. Better just to keep turning farmland at the edges of the existing major cities into suburbs, and keep enlarging the freeways that deliver all these people to the places further in where the jobs are.
You can make anything true if you pick your assumptions carefully enough. This particular study assumes that big screen tellies and cellphones are as important as food, power and rent. That's how they manage to come up with the (conveniently headline grabbing) conclusion.
Now I haven't read the bugger (and probably won't find the time) but the "perceptions of higher living costs" are mostly down to it costing more to live. It doesn't matter if you're lifestyle has changed or you've taken up an expensive drug habit - it costs more to live.
Let's see, in 1984 (or close enough to) I was paying a half share of $120 a week rent, petrol cost 60c a litre, a schooner of beer cost under $2 and I was making about $350 in hand a week. In 2012 that same house would rent for just under $500 a week, petrol costs $1.50 a litre, a schooner is around $5 and someone in my position then would be doing well if they take home $600 a week. But hey, it all works out even 'cause mobile phones and big TVs are cheaper...
I think I just spotted the problem here - the report was authored by AMP rather than any sort of credible source. For those not familiar with the Australian retail investment market, these guys are probably the biggest financial services company in Aus. I can well imagine that the price of German sedans, Japanese electronics and Colombian cocaine is of more concern to them than rent or food.
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