“First Home Buyers’ incomes have simply not kept up with the strong rise in land prices. Here is the proof,” Prosper Australia Buyers Strike campaigner David Collyer said today.
“This fifteen year period breaks away from a very long trend where wages and land prices were strongly correlated.
“In the last year alone, wages are down 1.4 per cent against GDP, while land is up 20.8 per cent.
Collyer was commenting on the release of the Land Values Affordability Comparator which examines both wages and land prices, over time, against the strength of the overall economy. The Comparator shows just how profoundly unaffordable land is for FHBs.
“It is no wonder buyers are angry and frustrated. Young adults are urged by their families and society to get started, to buy a home, to begin accumulating assets. But the numbers cannot be made to add up.
Current settings demand young couples dedicate around 40 per cent of both incomes for 20 years to buy a starter home. “A sacrifice this large is unprecedented and illegitimate.”
“FHBs have taken the only rational action possible: renounce home ownership for the foreseeable future while saving a larger deposit and investing elsewhere.
“The property market needs a continual flow of new entrants to maintain forward momentum. It is no longer receiving them. Our Buyers Strike merely formalises what the market is imposing on FHBs.
The Buyers Strike advocated by Prosper Australia has captured the imagination of FHBs visiting the GetUp site and following property issues elsewhere on the internet.
“The campaign has had no mainstream media coverage and must be actively searched out, which makes the groundswell even more remarkable,” Collyer said.
To see the campaign’s early impacts, and the passionate comments it has aroused, visit:
It must be noted that Prosper is not today calling the bursting of The Great Australian Land Bubble, but does assert it is ‘imminent’.
“Inflated land prices must and will revert to the long term mean. The US example shows the terrible economic pain a price correction inflicts on the most exposed – the recent buyer,” Collyer concluded. “Only those who stand aside will avoid this peril.”
* An xl spreadsheet of the graph data is available on request.