Back to the future

1990’s here we come again

I was born in 1965, which makes me Generation X. Just.

And I increasingly think the Australian housing market is heading back towards the conditions that shaped many of us during the 1990s. Not a crash. Not an Armageddon event. But a long, grinding period where housing prices go nowhere in real terms while affordability slowly repairs itself.

M first chart this post tells part of that story. Throughout much of the 1990s, national dwelling values grew by just 2.5% per annum, which was roughly the same as inflation. Housing wasn’t a wealth creation machine. It was somewhere to live.

Back then we drank tap water, were latch-key kids, takeaway was a treat, coffee came from a jar, and I never heard of avocado on toast.

The question is whether we are heading back there again.

And beyond the paywall I unpack the forces likely to reshape housing prices, affordability and demand, and explain why the decade ahead may look far more like the 1990s than the 2020s.