I recently came across this….
A 20 cent coin from 1970.
I started reminiscing.. because even though I put my kids through endless hours of 1980’s music on our car trips I also remember going to school briefly in the 1970’s when this coin could buy you a packet of chips or a meat pie at the school tuckshop and you might expect change from your purchase as well.
The 1970’s was famous for many things, one being high inflation… Witness..
inflation by year in Australia during the 1970’s::
1970: 3.44%
1971: 6.14%
1972: 6.02%
1973: 9.09%
1974: 15.42%
1975: 15.16%
1976: 13.32%
1977: 12.31%
1978: 8.00%
1979: 9.12%
There was an oil shock, stock market crash, war in Vietnam, removal of the gold standard and may other tumultuous forces that were feeding into these numbers during the 70’s
May we never relive those inflation levels during the current economic cycle.
The median house price in Sydney in 1970 was only $18,700 (Average full time wage was $4,100) and by 1980 it was $76,500.
It was a wonderful decade to be owning real estate.
In times of high inflation hard assets tend to do well, assets that can’t be printed or created in digital factories…. like credit, these assets include commodities (oil, gas, energy, precious metals etc) and.. of course real estate.
Returns like the 1970’s are unusual and I wouldn’t expect similar this decade, but it’s just a reminder to myself that in high inflation decades I’m happy to be owning physical real estate.
