Prices were lower in relation to income
I remember well the strict rule of thumb of only being able to borrow up to three times your salary max. That is what was always considered affordable/sensible. The problem for first time buyers now is that a mortgage of 3 times the average salary gets you nothing.
Charlie, either wages go up or prices come down! In Spain, Ireland and the USA they’ve come down arround 50% from peak (in the real world, as opposed to made up indicies) peak for Ireland 2007, USA 2006 and Spain 2004/5. Uk down circa 20% since then up circa 8 to 10%, now they’re going down again.
Lots more trouble coming to the US, they’ve just been papering over the cracks and playing pass the parcel with a ticking time bomb.
also read the comments at the end of the article.