The median house price in Australia is now $780,877 -- up 7.7 percent in the 12 months prior to December 2016. Then there's Sydney and Melbourne. It will cost you over 12 times your annual income -- up from four times in the mid '70s -- to buy a house in Australia's two biggest cities.
But let's forget 'The Australian Dream' for a second, assume house prices keep rising and imagine you don't buy a place of your own. How can you be smart with your money in other ways?
Your twenties
Unburdened by the need to live at home with your parents until you're 30 to save for a house deposit, you're now free to rent where you actually want to live, near hipster cafes that serve smashed avo on toast. Baby boomers with multiple investment properties will be dead keen to rent to you in a market increasingly saturated with rental properties that are markedly cheaper per week than mortgage payments.
With some of your money left after paying rent you can start to tackle the credit card and student loan debt that you racked up during your slightly less forward-thinking university or TAFE years.
Try to contribute a little extra into your superannuation. It seems like a long way off, but compound interest means any extra money you put towards your superannuation when you're young will pay off big time when you retire. The Australian Government offers co-contributions to super for low income earners which means if you earn less than $50,454 per year, the government will contribute up to $500 annually into your super account.
Your thirties
Now is the time to build your investment portfolio. A great way to do this with diversified risk is to invest in low-fee index funds. It's not as complicated as it sounds, and a portfolio of shares is way less maintenance than any house, and pays actual dividends.
Rent a bigger house with a backyard for your kids to run around in. Don't buy a lawnmower or ladder, and don't spend your weekends doing house maintenance. You'll also save money by not having to pay for insurance, property tax, water bills, land rates, stamp duty or lawyer fees.
Salary sacrifice into your superannuation account. At this stage of life, you need to contribute more to your super than the compulsory government contributions of 9.5 percent to live comfortably in retirement.
Your forties
Start a savings account for your kids when they are young to help them out with university fees when they are older. Compound interest will ensure that even small regular amounts saved now will increase into a substantial lump sum years down the track.
Consider your parents' future. They'll likely be retired and may need support as well as care as they get older.
Continue building your investment portfolio and continue to see average returns of 6-7 percent annually.
Your fifties
Rent a designer apartment in the city. Your kids have left home, time to live the high life. Alternatively, move into the house your parents left you in their will or sell it and buy the inner-city pad outright.
If your parents weren't quite as good with money as you are, buy your place with some of the money you've been savvily investing for the past 20+ years. No mortgage necessary.
Think about protecting your investments against any potential drops in the share market by moving some of your investment savings into government bonds.
Put as much into your superannuation as possible, bearing in mind that the Australian Government has capped the amount you can salary sacrifice before tax at $35,000 per year if you're over 50 (prior to 50 the amount is $30,000).
Your sixties
Retire early, cash out your super and live the new Australian dream of day-long golf games, high-tea parties, book clubs and sky-diving adrenalin trips.
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