Contents
1. Purpose and Scope
This document provides complete methodological transparency for the accompanying analysis of Australian housing affordability from 1907 to 2024. The analysis calculates the ratio of Sydney median house prices to average annual earnings (derived from Average Weekly Earnings × 52) to demonstrate changes in housing affordability over time.
The scope is deliberately limited:
- Geographic focus: Sydney as primary market (longest continuous data series), with Melbourne as secondary reference
- Property type: Detached houses only; units and apartments excluded
- Income measure: Average Weekly Earnings (all employees) as primary series; minimum/basic wage as secondary reference
- Time period: 1907 (Harvester Judgement) to 2024
2. Income Data Sources
2.1 Average Weekly Earnings (Primary Series)
The Average Weekly Earnings series is the most robust long-run income measure for Australia. Multiple sources have been spliced to create a continuous series:
ABS Cat. 6350.0 – Average Weekly Earnings, Australia, 1941–1990
Historical series linking payroll tax-based estimates with employer survey data. Published 1991, now archived.
RBA Occasional Paper No. 8 – Australian Economic Statistics 1949–50 to 1996–97
Reserve Bank of Australia compilation of historical economic statistics including Section 4.17 (Wages and Earnings) and 4.18 (Average Weekly Earnings).
ABS Cat. 6302.0 – Average Weekly Earnings, Australia (Current)
Current AWE publication, released bi-annually (May and November).
2.2 Measuring Worth – Historical Wages
Measuring Worth – Australian Wages Series
Comprehensive series from 1860/61 compiled by Hutchinson et al. Splices: All-sector wages to 1899/00, manufacturing 1900/01–1968/69, then all-sector again from 1969/70.
2.3 Minimum/Basic Wage (Secondary Series)
Fair Work Commission – National Minimum Wage Orders
Minimum wage history from 1906, starting with the Harvester Judgement (7 shillings per day = 42 shillings per week = £2-2s).
State Library of Victoria – What It Cost
Victorian Year Book and historical wage records, 1923–1964.
3. House Price Data Sources
Stapledon (2010) – A History of Housing Prices in Australia 1880–2010
The most comprehensive long-run house price series for Australia, covering 130 years. Sydney data based on asking prices from the Sydney Morning Herald (1880–1943), then sale prices (1950–1970).
Abelson & Chung (2006) – Housing Prices in Australia 1970 to 2003
Reconstructed median prices using Valuer-General and Land Titles Office records. The authoritative series for Australian capital city median house prices across this period.
REIA Real Estate Market Facts
Ongoing quarterly publication of median house prices across capital cities. Methodology changed from member-reported sales to Land Titles Office data (most states) from September 1998.
CoreLogic / Cotality – Home Value Index (2000–present)
Hedonic (quality-adjusted) methodology. The primary contemporary source for Australian residential property values.
ABS Cat. 6416.0 – Residential Property Price Indexes: Eight Capital Cities
Official ABS residential property price index, stratified by dwelling type.
abs.gov.au/statistics/.../residential-property-price-indexes
4. Splice Points and Methodology Changes
Why This Matters
No single data source covers the full 1907–2024 period for either income or house prices. Multiple series must be joined ("spliced") at transition points. At each splice, the basis of measurement may shift, introducing potential discontinuities. These are documented below for transparency.
| Year | Series | Change Description |
|---|---|---|
| 1941 | Income | ABS AWE series commences (Cat. 6350.0). Pre-1941 income figures are estimates or derived from wage awards. |
| 1966 | Both | Decimal currency conversion (14 February 1966). All pre-1966 figures converted at £1 = $2 AUD. |
| 1970 | House prices | Abelson & Chung series begins, providing capital-city-specific medians. Prior prices from Stapledon's composite series. |
| 1981 | Income | AWE methodology change: pre-1981 based on payroll tax data; post-1981 from direct employer surveys (Cat. 6302.0). Potential discontinuity in measurement basis. |
| 1998 | House prices | REIA switches from member-reported sales to Land Titles Office data in most states. Generally improved accuracy. |
| 2003 | House prices | Abelson & Chung series ends. Transition to ABS RPPI and CoreLogic data as primary references. |
5. Currency Conversion
Australia converted from pounds, shillings and pence (£ s d) to decimal currency on 14 February 1966.
Conversion Rate
£1 = $2 AUD
Pre-Decimal Notation Examples
- £2-2s (two pounds, two shillings) = £2.10 = $4.20
- 42 shillings = £2-2s = $4.20
- 7 shillings = £0.35 = $0.70
All pre-1966 figures in this analysis have been converted to decimal dollars at the official rate for comparability.
6. Quality Adjustment Considerations
House price comparisons over long time periods are complicated by changes in what a "house" actually means. The analysis does not apply quality adjustments to historical prices. This is a deliberate methodological choice: we are measuring the cost of accessing shelter in a given location, not the cost of a constant-quality dwelling.
Dwelling Characteristics Over Time
| Era | Typical Floor Area | Typical Block Size | Persons per Household |
|---|---|---|---|
| 1907 | ~80–100 sqm | 800+ sqm | 4.5+ |
| 1950 | ~100 sqm | 600+ sqm | 3.7 |
| 1970 | ~120 sqm | 600 sqm | 3.2 |
| 1990 | ~180 sqm | 500 sqm | 2.8 |
| 2010 | ~235 sqm | 400 sqm | 2.5 |
| 2024 | ~240 sqm | 380 sqm | 2.5 |
Sources: ABS Census (persons per household); academic research papers on dwelling size; CommSec Home Size Reports.
Stapledon (2007) estimates quality improvements add approximately 0.6% per annum to price growth, compounding to approximately 35% over 50 years. This explains some – but nowhere near all – of the observed price increase relative to income.
7. Calculation Methodology
House-to-Income Ratio
The primary metric is calculated as:
Ratio = Sydney Median House Price ÷ (Average Weekly Earnings × 52)
Data Selection
- House prices: Sydney median for detached houses, as at June/December of reference year
- AWE: Full-time adult total earnings where available; all-employees total earnings otherwise
- Annualisation: AWE × 52 weeks
Rounding
Ratios rounded to one decimal place. Dollar figures rounded to nearest dollar (historical) or nearest $1,000 (contemporary).
A Note on Income Measures
Using individual AWE (rather than household income) provides the longest consistent series but understates household purchasing power for dual-income families. From the 1970s onwards, rising female workforce participation increased household income faster than individual earnings. The ratios presented therefore represent a "single earner" perspective – the affordability picture for dual-income households is somewhat better, though the trend direction is identical.
8. Limitations and Caveats
- Sydney focus: Sydney has the longest continuous data series but is not representative of all Australian markets. Perth, Brisbane, and regional markets have distinctly different price trajectories.
- Median vs. mean: Median prices better represent the "typical" experience but can be affected by compositional changes (e.g., if more expensive suburbs dominate sales in a given period).
- Houses only: Excluding units overstates the cost of "shelter" broadly, but provides consistency over a period when units were rare (pre-1960s) to common.
- No tax adjustment: The analysis uses pre-tax earnings. Post-tax purchasing power has improved relative to pre-tax income due to bracket creep offsets and family tax benefits, though this effect is modest compared to the house price changes observed.
- Interest rate context: A high price-to-income ratio at low interest rates may be more serviceable than a lower ratio at high rates. The analysis deliberately focuses on the capital barrier (deposit and total price) rather than serviceability.
- Pre-1941 estimates: Figures before 1941 rely on wage award records and academic estimates rather than direct survey data. They should be treated as indicative.
9. Verification Checklist
The following checks were performed during the construction of this analysis:
- Each data source URL verified as accessible (December 2025)
- Pre-decimal currency conversions double-checked at £1 = $2
- Splice points explicitly noted in the chart data
- Cross-referenced AWE figures against RBA Occasional Paper 8 tables
- Cross-referenced house prices against Abelson & Chung tables
- Confirmed CoreLogic 2024 figures refer to "separate houses" not "all dwellings"
- Verified ratio calculations independently (price ÷ annualised AWE)
- Checked that wartime price controls (1942–1949) are noted in the data
10. Complete Source List with URLs
Income Data
ABS Cat. 6350.0 – Average Weekly Earnings, Australia, 1941–1990
ABS Cat. 6302.0 – Average Weekly Earnings, Australia (Current)
RBA Occasional Paper No. 8
https://www.rba.gov.au/statistics/frequency/occ-paper-8.html
Measuring Worth – Australian Wages
Fair Work Commission – Minimum Wage Since 1906
https://www.fwc.gov.au/documents/resources/minimum-wage-since-1906-fitter-table-real-value.pdf
State Library of Victoria – What It Cost
House Price Data
Stapledon (2010) – UNSW Discussion Paper
http://research.economics.unsw.edu.au/RePEc/papers/2010-18.pdf
Abelson & Chung (2006) – Macquarie University
CoreLogic / Cotality – Home Value Index
ABS Cat. 6416.0 – Residential Property Price Indexes
General Reference
RBA – Long-run Trends in Housing Price Growth
https://www.rba.gov.au/publications/bulletin/2015/sep/pdf/bu-0915-3.pdf
RBA – Household Sector Chart Pack
11. Academic Bibliography
Abelson, P. & Chung, D. (2005). "The Real Story of Housing Prices in Australia from 1970 to 2003." Australian Economic Review, 38(3), pp. 265–281. Macquarie University.
Abelson, P. (2009). "Housing Prices and Rents in Australia 1980–2023: Facts, Explanations and Outcomes." Macquarie University Working Paper.
Stapledon, N. (2007). "Long Term Housing Prices in Australia and Some Economic Perspectives." PhD thesis, University of New South Wales.
Stapledon, N. (2010). "A History of Housing Prices in Australia 1880–2010." UNSW Business School Discussion Paper 2010/18.
Hutchinson, D.E. et al. "Australian Wages and Earnings Since 1860/61." In Measuring Worth. Available at measuringworth.com.
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