This big Land Down Under is forever changing. Over a 27-year period that saw the national population increase 49 percent (from 18.6 million to 27.7 million), things have changed in many ways.
Back in 1998, the median house value was $130,000 in Brisbane and $230,000 in Sydney.
Now it is $1 million and $1.5 million, respectively.
In the sporting arena, the reigning premiers were the Adelaide Crows (AFL) and Newcastle Knights (NRL).
6 out of 8 state and territories were then under a Liberal Party government. And John Howard was in his third of 11-years as Prime Minister.
Australia’s unemployment rate in August 1998 of 7.8 percent was quite a bit higher than the current 4.3 percent, although economic conditions were on the improve.
Property markets
From a real estate perspective, many of Australia’s 400+ townships were experiencing mild price rises (capital growth rates of between 0 and 5 percent).
In general, New South Wales was the strongest state while Queensland, Tasmania and South Australia were the least inspiring.
Situated 60-kilometres north of Canberra, the charming regional township of Yass produced the highest capital growth rate (18 percent).
For those with a curious mind, the 27-year period has seen the Yass municipality’s population increase from 11,000 to 17,700 and the median house value from $115,000 to $850,000 (which is a similar current value as Perth and Melbourne, and higher than Hobart and Darwin).
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Other locations that were among the best performed property markets in 1998 were Kiama NSW (15 percent), Forbes NSW (13 percent), Mudgee NSW (12), Copper Coast SA (11), Bowral NSW (11), Orange NSW (10), Margaret River WA (10), Karratha WA (10), Sydney NSW (10), Roxby Downs SA (9), Burnie TAS (8), Port Lincoln SA (8), Warrnambool VIC (8), Geelong VIC (7), Kyneton VIC (7), Canberra ACT (7) and Port Douglas QLD (6).
General conditions
After sitting at a lofty 7.0 percent just 2-years prior, the RBA Cash Rate was on its way down. Although the 5.0 percent in August 1998 was still quite a bit higher than today’s 3.85 percent.
Throughout the late 1990’s, a standard house in many townships across the country produced a rental yield of circa 6 percent. A comparable property purchased today is likely to have a rental return in the vicinity of 4.0 to 4.5 percent.
Back then, borrowers had significantly fewer financial institutions competing for their business and very little innovation with loan product options.
Only 15 percent of home loans were organised by mortgage brokers, whereas 8 out of every 10 home loans in Australia are now settled with thanks to the skill and efficiency of mortgage brokers.
History shows that the late 1990’s is the last of the good ol’ days – when homes were detached houses with a handsome backyard and neighbourhoods were full of children playing outdoors.
In the late 1990’s, only 30 percent of new homes built each year in capital cities were apartments. That figure was as small as 5 percent in most regions.
Sadly, at least half of the new properties built in our bigger cities these days are soleless boxes in the sky.
Related article: Comparison of Boomers, Xers and Millennials
The change in food and exercise habits from the start to the end this period is reflected in the generally bigger bulge around people’s bellies.
It’s true – compare family photos from a generation ago.
Travel was very different 27-years ago. Very few people could afford to fly.
To appreciate how things have changed, Australian airports serviced 55-million domestic and 14-million international passengers that year, compared to 116-million and 39-million last year.
What’s the significance of 27-years?
Well, that was when I chose to walk away from the comfort of a regular employee’s salary from one of Australia’s biggest companies.
3 August 1998 was a Monday.
It was my very first day as a business owner.
I don’t know whether it is a ‘middle-age thing’ or not, but at 55-years of age I do more and more reflecting these days.
Anyway.
Google, Facebook and the i-phone did not exist when I entered the business world in August 1998.
My office was a bedroom kitted out with a desktop IBM computer, a printer, facsimile machine and reams of paper (plain, plus my corporate letterhead).
A lot of things either did not exist or were not very common back then
‘Spreadsheet’ had more to do with making a bed than compiling a bunch of numbers on a desktop computer screen…
Property data and ABS statistics were not readily available…
Video calls and streaming were not a thing…
Employees did not have remote server access…
Social media was not around…
And a large portion of consumer purchases were completed with cash or cheque.
Back then, every household was fitted with a wall-mounted telephone.
A majority of adults, although not all, did have a mobile phone in 1998. But the only function was audio conversation and SMS (I can remember my Nokia 5110).
Like most small businesses, I did not have a website. The most common marketing collateral was printed corporate brochures.
All written communication was in the form of posting a letter or sending a facsimile (email didn’t exist).
The ‘change’ which yours truly is most proud to have orchestrated is the pioneering of ‘borderless’ investing in Australian property markets [here’s a great Case Study].
And the scientific assessment of nationwide property markets (aka ‘Propertyology’) will forever remain a passion.
Progress?
One thing which has not changed over the last 27-years is the very poor financial literacy of most Australians.
Despite all of the wonderful things associated with innovation and all that jazz, society suffers an epic failure to understand the importance of making a handful of truly good financial decisions during their 45-year working life.
As a consequence, only 2 out of every 10 Australians who are already aged 65+ are now financially independent.
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The rest either remain handcuffed to their job or are reliant on a taxpayer-funded unemployment benefit known as a scabby aged pension.
I believe that ‘some’ of the changes to the Australian way of life over the last 27-years have been great.
The progressive evolution of a society which now depends on technology does worry me though.
And the fast-growing volume of humans who automatically default to AI is already driving me absolutely nuts.
Instead of remaining organically curious and one gaining bona fide intelligence through exploring (authentic) information, AI is turning very capable human brains into shrivelled cabbages.
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