These lucky Aussies are $292,224 richer since Covid

One group of Aussies has become significantly more wealthy over the past four years despite flat wage growth and the cost of living crisis.

It’s a humbling fact for plenty of Aussies, your home earns more than you do.

And it underlines the reason why so many of us strive to own a place of our own and why it is so tough for those who don’t in the current cost of living crisis.

But as wages flatline and home prices continue to rise, the Aussie castle is adding the zeros to your bank balance while your wage is poured into making ends meet from day to day.

According to real estate data firm PropTrack, Australia’s media dwelling price of $761,000 has risen 38.4 per cent over the past four years since March 2020 and the start of the Covid pandemic.

That’s a dramatic increase of $292,224 in your average Australia property, which works out to $73,056 per year.

Your home is making money for you.

According to the ABS, the average yearly salary in Australia is $67,600.

So over the past four years, your home has earnt $21,824 than you. And that’s money in the bank, that isn’t long gone on the likes of groceries and power bills.

What makes matters worst is the collapse in real wages.

But, first the good news for home buyers. According to PropTrack’s latest Home Price Index:

+ National home prices lifted 0.45 per cent to hit a new record in February, marking the largest monthly rise since October 2023. That brings prices up 0.82 per cent so far this year to sit 6.15 per cent above February 2023 levels.

+ Prices across the combined capital cities rose 0.48 per cent to a fresh peak in February. Capital city prices are now 7.06 per cent above the same time last year.

+ Brisbane values have surged 60.7 per cent since the onset of the pandemic and are now on par with Melbourne.

However, according to the Australian Bureau of Statistics, real household disposable income suffered its largest ever annual decline last financial year, plunging 5.1 per cent.

As a result, Australian households relinquished all of the income gains from the Covid-19 pandemic’s stimulus measures. Australia’s real per capita household disposable income has fallen back to levels observed in early 2019, which were only a little above 2010.

Again, this underlines, what a great asset a home is, in good and bad economic times. And as Aussies continue to endure a cost of living crisis, most economists agree unemployment is headed skyward and the country might even endure a recession soon.

So while the demand for labour is soft, the demand for housing remains very strong.

These economic conditions are expected to continue for the foreseeable future.

“The slowdown in home price growth recorded toward the end of 2023 has reversed this year, with prices hitting a new peak in February,” PropTrack Senior Economist Eleanor Creagh said

For plenty of Aussie workers their wages aren’t keeping pace with their home price growth. Picture: David Swift

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“More homes have hit the market this year, but demand has kept up with that increase. The expectation that interest rates will fall in the second half of 2024 is likely providing a positive tailwind for activity.

“Housing demand is also being buoyed by population growth, tight rental markets, resilient labour market conditions and recent home equity gains. Meanwhile, the sharp rise in construction costs and labour and materials shortages have slowed the delivery of new builds, hampering the supply of new housing.

“Looking ahead, the positive tailwinds for housing demand and a slowdown in the completion of new homes are likely to offset the impact of reduced affordability and a slowing economy. As a result, prices are expected to lift further in the months ahead.”