The Aussie dollar…
… was floated by the Hawke government back in 1983 – just over 30 years ago. Since the float, the highest-ever exchange rate achieved against the $USD was $1.10, in mid-2011. That is more than twice the value of the lowest point, which was just under $0.48 in early 2001. Currently, as most travellers would know, the dollar has fallen a long way below parity, to a current rate of US$0.70.
Australian property is unaffordable.
Not for everyone and not all property, but the Demographia Annual International Housing Affordability Survey ranks 360 metropolitan markets in nine countries. Over the ten years that the survey has been running, each of Australia’s major markets has been severely unaffordable. That won’t, of course, be news to first home buyers.
The size of mortgages has doubled in real terms over the past ten years.
Canstar analysis found the average increase in home loan repayments has been 105% over the past decade, compared to wages growth of 54.5% and overall inflation of just 31.4%, leaving no doubt that mortgage repayments are taking a disproportionate chunk of the family budget.
Interest rates are low!
Possibly the only thing keeping mortgages within reach are Australia?s historically low interest rates. Great for those with a home loan, but terrible for many self-funded retirees.
Fortunately, we’re rich.
The Credit Suisse Global Wealth Report, released in October 2015, found that the average wealth of Australian adults is approximately US$364,900 – one of the highest in the world. In fact we are third highest of the nations surveyed, behind only Switzerland and New Zealand. Our median wealth of US$168,300 is second only to that of New Zealand.
According to the report, only 7% of Australians have net worth below US$10,000. This compares to 28% in the United States and 71% for the world as a whole. Average debt amounts to 21% of gross assets. The proportion of those with wealth above US$100,000 is the highest of any country – over eight times the world average.
And we have relatively low levels of inequality.
While there will always be in every country some members of the population who are severely financially disadvantaged, the Credit Suisse report found that Australia has a relatively low level of wealth inequality, as reported above.
Beyond all this, of course, is the underlying knowledge that we are indeed a lucky country and that each and every one of us is lucky beyond measure just to be living here. Although some luckier than others; here’s a great speech to check out for a bit of perspective: http://www.abc.net.au/news/2016-01-24/stan-grant’s-racism-is-killing-the-australia-dream-speech-viral/7110506