Since 1975: Wages up 10x, house prices up 30x

I did a detailed post with similar numbers to the following back in October 2011, but it is good to see the mainline press picking this up and making a point of it. You can see my 2011 post here.

In this article from PerthNow they compare prices 40 years ago in 1975 to now. They point out that in 1975:

  • a loaf of fresh baked bread from the baker was 24 cents (and it was delivered to your door or at least to your front gate),
  • a litre of milk was 30 cents,
  • the West Australian newspaper was 12 cents, and
  • a litre of petrol was 57 cents.

Since then bread has gone up by 12 times, a litre of milk has gone up by a factor of five, the newspaper is 20 times more expensive, and petrol has only tripled (before the drop in crude prices at the start of the year).

However, the main point of the article is that the average house price in Sydney in 1975 was $28,000 whereas today it is $850,000. House prices have increased by 30 times since 1975.

The Perth numbers are slightly worse. The average house price in Perth in 1975 was $18.850 and is now $605,000. House prices in Perth have increased by 32 times.

This wouldn't be so bad if the average wage had increased by a similar number but the average wage in 1975 was $7,618. The average wage now is $72,000. So wages have gone up by about 10 times.

No wonder people are having trouble buying a house.

You can see the PerthNow article here.