Episode Details

Homeownership is looking further out of reach for anyone without family wealth, as over the last few years property prices kept growing and wages fail to keep up.

Over the last decade or so property prices keep growing and wages failed to keep up and over the last few years affordability seems to have decreased as interest rates keep increasing.

Is it really harder to get into the property market today than it was a number of decades ago?

That's what I discuss today with independent financial adviser Stuart Wemyss.

And even if you already own a home, I'm sure our discussion will be valuable because it will help you understand what we believe is ahead for our housing market.

Is homeownership harder today?

Many people are suggesting it's much harder to buy a property today than it was years ago.

They're telling us that Baby Boomers don't really understand how hard it is.

My guest today, independent financial advisor Stuart Wemyss, believes it's actually easier to buy a property today than it was many decades ago.

Now I know some people listening to this one disagree so I'm looking forward to hearing his views.

Millennials are telling us that buying a house today is far harder than when their parent got into the market because the rate by which property prices have soared is well beyond that of wage growth.

At first glance these arguments make sense, but there's more to it than that.

I would like to suggest that in many respects, buying a property today is easier than it was many decades ago.

1. Abundant access to information, knowledge, strategies, advice, and so forth

How do you get ahead financially? One solution is to get the best advice so that you make the most of your financial opportunities. Often people learn by trial and error, but that can be expensive and waste valuable time. You can fast-track your financial success by learning the best way to use your money.

● There is an absolute abundance of information that is available on the internet.

● Most of it is accessible instantaneously at no cost.

● Blogs, forums, podcasts, books, websites, software, and so on.

It cannot be underestimated how valuable that is.

25 years ago, no such information was available. There were a few books about property investing, but not many. The only way to learn about borrowing strategies was by meeting bank staff, but they weren't particularly knowledgeable or helpful. Therefore, unless you knew a successful property investor, it was hard to access knowledge.

As the saying goes, "knowledge is power".

2. Much higher borrowing capacity

Thirty to forty years ago, borrowing 3 times your gross income was seen as very high risk. Today, the banking regulator (APRA) classifies a high-risk borrower as anyone that borrows more than 6 times their gross income.

Therefore