Are there any stats where we can look at gross disposable individual incomes v 30th percentile houses across time.
I'm sure it wouldn't be to hard to find the raw data & put together your own spreadsheet.
What the RBA is saying, is that house prices have increased(even in the 30th percentile), but affordability stays the same because real disposable income has increased. So what, you say?
Well of my two points above, you need to strip second party participation from the figures, because it skews the numerator. Some would disagree on this point, but we are talking of affordability here. So because a women now works 10 or 20 hours per week more on average, yet the house price affordability index stays the same implies that all the extra work has gone into making affordability the same. In other words, it's being propped up by that extra participation. I hardly call that a relevant gauge of affordability.
But that's reality... and I don't see it changing any time soon. You appear to be saying that we should have an affordability guage that doesn't correspond reality ?????... and ignore the extra affordability from dual incomes - which is likely to be the norm in the future.
If you go back 150 yrs, 95% of the population was living hand to mouth, with $0 disposable income... and the whole family was working. Affordability then was infinitely worse than it is now!.
You can't state that house prices have increased, but it's ok because disposable income has increased, if that increase was brought about by increased family participation. i.e extra work for the same result.
I'm not actually stating that 'its OK'... I'm stating that that's the reality...
households can afford more expensive houses if both of them choose to work.
You're stating that it's from 2 sources - higher disposable income & dual household income. I think you agree that a single wage earners disposable income has increased at ~6% pa for 20yrs+ ? There are many other reasons why any affordability gauge can be considered wrong at some point in its life.... mostly because things change all the time (IRs, tax rates, dual incomes, demographics, govt policy...). There are several threads here about it - do a search.
If you want a debate about whether it's right or wrong that dual incomes should be needed to afford a 30th percentile house, then I'll be bowing out..... social issues hold no interest for me.
If couples didn't
choose to pay for an expensive house then they wouldn't both work.
On the point of HEC's, while it doesn't affect CPI, it affects disposable income for approximately half the working population of FHB age. You lose 7-10% of your post tax disposable income for 10-15 years, and I hope this was taken into consideration when looking disposable income measures.
It's the RBA who put the figures together, they're pretty thorough, so I'd guess that it's taken into account. I think HECs and health insurance are irrelevant.
But getting back to the original point....
Can we agree with the RBA that using the tabloid yardstick is misleading for several reasons, and that 30th percentile houses have never been more affordable to FHB households ?