ABC star Alan Kohler reveals why his own kids have suffered due to Australia’s big mistake

The ABC’s finance commentator Alan Kohler has expressed sadness that his kids aren’t able to buy a house cheaply like he was able to.

The 72-year-old father of Nine’s finance editor Chris Kohler, 35, said his Baby Boomer generation had it a lot easier.

Alan Kohler, now a grandfather, recalled how he and his wife Deborah Forster, a novellist, were able to buy a Melbourne house for $40,000 in 1980 – the year he turned 28.

Back then, he was earning $11,500 as a young journalist with The Age newspaper.

‘So we also paid about 3.5 times my salary for the house, although we were better off than my parents because my wife was working,’ he wrote in a Quarterly Essay.

He is sad his three Millennial, adult children Phoebe, Alice and Chris had struggled to buy a home, even with two incomes from high-paying jobs.

‘Over the past four years, our three children and their partners all bought their own first houses,’ he said.

‘They’re doing it later than we did, and much later than my parents, so they’re making better money, and both partners are working, of course, but they paid about 7.5 times each income for their houses.’

The 72-year-old father of Nine’s finance editor Chris Kohler (pictured with wife Sussanah) said his Baby Boomer generation had it a lot easier

‘In other words, my children – and all young people today – are paying more than twice the multiple of their income for a house than their parents – and their grandparents – did, and it’s only vaguely possible because both partners work to pay it off.’

Alan Kohler said unaffordable house prices just worsened inequality. 

‘It’s destructive because of the inequality that results: with so much wealth concentrated in the home, it stays with those who already own a house and within their families,’ he said.

‘For someone with little or no family housing equity behind them, it’s virtually impossible to break out of the cycle and build new wealth.’

In 2024, Melbourne’s median house price of $925,762 is 9.3 times Australia’s full-time salary of $100,017.

In 1980, when Alan Kohler bought his first house, the median house price in Melbourne was $39,500, which was only three times the average annual salary of $13,042. 

Alan Kohler blamed a surge in immigration levels during the 2000s for housing becoming unaffordable, just as the 50 per cent capital gains tax discount debuted. 

That meant that if a house went up in price by $100,000, a property investor would only have to declare $50,000 of that gain on their annual return. 

‘Whereas in the rest of the world investing in real estate is all about getting rental income from tenants, in Australia it’s about getting an income tax deduction and then a capital gain,’ he said.

Alan Kohler is sad his three adult children Phoebe, Alice and Chris (pictured right with son Johnny) had struggled to buy a home, even with two incomes from high-paying jobs

Labor lost the 2016 and 2019 elections vowing to limit negative gearing tax breaks to newly-built homes and halve the capital gains tax discount to 25 per cent, from 50 per cent. 

Had former leader Bill Shorten triumphed, five years ago, against former Liberal prime minister Scott Morrison, an investor who made a $100,000 capital gain when selling a property would have had to declare $75,000 on their tax return instead of $50,000.

Treasury is now doing economic modelling on limiting the number of homes a landlord can negatively gear, where rental losses compared with mortgage repayments and upkeep are claimed on tax. 

Alan Kohler said house prices would have to stagnate for two decades so wages could catch up, and return debt-to-income ratios back to where they were in the 1990s.

He suggested cutting immigration levels so building activity could keep pace with population growth. 

Annual net overseas migration levels climbed from 100,000 in the late 1990s to more than 300,000 by the late 2000s, before hitting record-high levels above 500,000 earlier this year. 

‘If the government were serious about housing affordability, it would announce an affordability target like the one that I am suggesting of something like three to four times average incomes, and would say: “We’re going to achieve that target by doing everything we can to ensure that house prices stay where they are for 18 years to allow incomes to catch up”.’