I think from the title itself, it’s clear that it’s also something which many of my friends, the millennials are complaining. They are saying that their salaries have not been rising as fast as how property prices have been rising. Thus, there’s that thinking that perhaps there will soon be a generation without homes to their names. It’s also known as homeless generation. Just google for it and we will find never-ending articles about it too, thus making the millennials even more worried and may just choose to rent instead.
To understand what has been happening to the property market and the potential buyers’ income, perhaps we look for some clues from an advanced property market. London property market is way more advanced than ours. Of course, their economy is also an advanced economy though I think Brexit is causing them uncertainties too.
Article in finance.yahoo.com Analysis of official data by digital broker Mojo Mortgages and Yahoo Finance UK reveals the stark contrast between the generations in the property market. A baby boomer born in the 1950s could buy the typical British home for about £16,800 (RM91,630 at today’s exchange) in 1979, if they were able to get on the ladder as buyers often did in their 20s. The average home only cost just under four times the average pay packet, with the typical worker taking home around £4,200 (RM22,908 at today’s exchange) a year. (In other words, the home prices were just 4 times the annual salary!)
Millennials looking to buy a home face prices that are now at least 14 times higher than when baby boomers tried to get on the property ladder in the late 1970s. Meanwhile, the average wages have risen less than seven times over since 1979. According to data from the Land Registry, the average property sold for around £235,300 (RM1.28 million) last year, while typical annual salary is only at £29,000 (RM158,171) last year, according to the Office for National Statistics (ONS). Please do read the many more numbers at Article in finance.yahoo.com
Unfortunately there’s no mention of the Gen-X people. Well, if we are the in-between of the Baby Boomers and the Millennials, that means the difficulty for us in buying a home should also be in-between the two generations too. Seriously though, I think the baby boomers had it much harder then. There are fewer options where choices are concerned and it’s also far harder to get a home loan then. I know because my parents also told me the hardship they endured just to buy their first property then.
The number of jobs during the 70s and the 80s were far fewer than today and everyone then would want to keep their jobs and anyone telling their friends that they have resigned and will be taking a break is totally unheard of then! Today, it’s considered common enough even if we cannot say this is the norm, yet. I think it’s better to find ways to buy a property instead of being too worried about all these averages which are being reported yeah. There are many countries where the people have a higher net-worth and one major reason is also because of their ownership of a property. Happy following.
Next suggested article: Millennials disrupting the property market? Everyone has a hand too