The dream of owning a home in Australia is increasingly becoming a distant reality for many, as house prices continue to soar. But perhaps we need to shift our perspective. Traditionally, we measure house prices in Australian Dollars, but what if we start looking at it through the prism of Bitcoin?
Consider the Australian Dollar's purchasing power: it's declining (rapidly!). This isn't a reflection of real estate values skyrocketing as much as it is about the dollar losing value. The Reserve Bank and the Australian banking system's expansion of the money supply (aka currency debasement) inevitably leads to asset price inflation. In a credit-based monetary system, this inflation is not just expected; it's necessary. Without it, the system faces the risk of collapse.
This scenario prompts those with capital to seek refuge in hard assets like property, further inflating prices and putting homeownership out of reach for the average Australian. But there's a twist in the tale when we introduce Bitcoin into the equation. Bitcoin represents a scarce, sound form of money, unlike the Australian Dollar. It's not subject to the same economic policies that debase fiat currencies.
When we plot Australian median house prices against Bitcoin houses actually become more affordable over time. I repeat: houses become more affordable! So if you save in Bitcoin, over time you will be able to afford more house, not less. This underscores Bitcoin's unique strength as a stable store of value.
By saving in Bitcoin, Australians can find an alternative pathway to homeownership. Saving in Bitcoin makes the prospect of buying a house more realistic than relying on alternative savings methods - like cash, CDs, or even stocks.
Chart courtesy of Jono Spears. Chart updated 3rd June 2024.