A tale of two cities -Melbourne and Sydney
- Thread starter mech81
- Start date
Really? What if that income is $180,000 or more??
Then they could be priced out of homes that could previously have been purchased by somebody on that single income, because those homes could be snapped up by a family with dual x $180,000 income.
The house price to single income ratio used to be 2-3x. Now it's 6-7x.
People on single incomes are priced out of homes they could previously afford.
Not the same quality of house you could buy for 2-3x income 20 years ago.
Thanks for your helpful response anyway.
Here we go again.Just over 20 years ago I purchased my first PPOR as a single female. It was ghastly, but it was all I could afford. I was not on a huge income.
Fast forward and my single daughter wants to buy a home. She has the deposit, she has made offers and she can afford to do it on her very minimal wage, she is just scared of the commitment.
There are plenty of single people purchasing homes on single incomes. They might not be new, they might not be pretty, they might not be in the 'right' suburbs, but they are doing it. Nothing has changed, just the expectations of those looking to purchase these days.
Buying your first home is never easy. It wasn't easy 20 years ago, and it is not easy now.
There's lots of reasons for this, including the location premium (ie land costs more), building materials (gone up heaps) and the cost of labour (gone through the roof). Bear in mind also that 20 years ago there were fewer double income families than now (and the second income was often much less). Credit was also harder to get.
What we're seeing now is credit addiction withdrawal. Not a particularly bad case, but enough to be uncomfortable for many.
Australia still has a higher rate of home ownership than many other places.
Demonstrably incorrect. All the statistics show a doubling of the house price to income ratio over the past 20 years. Dual incomes are now the norm, and prices have risen accordingly. What used to be affordable on one income now requires two.
Single incomes were the norm, now double incomes are the norm. People are also have higher incomes in real terms than they used to, but enjoy much lower prices on a range of things compared to 20 years ago.
House prices have risen because they could.
Yet there are still those on single incomes doing it. Funny that!
Of course some can do it. That was never my point. My point is that it's twice as difficult now. Although people can do it, it's twice as hard. The type of property that the average person can afford on one income is only half as good as it used to be, relative to the total housing pool.
But the total housing pool is now much larger, and has wider variety in size, location, function and price.
House values are a moving target as so many past cycles have shown.
Most Australians live just within there means. All their surplus cash is generally wasted with some paying a mortgage before they waste the remainder.
My point being when house are more affordable for whatever reasons people will spend more to purchase a better PPOR.
When this adds to living costs along with other pressures this effects house prices and house to wage ratios.
Why are you suprised or angry at this point in the cycle.
The market may take a breather now and the ratio may improve.
Instead of waisting your time rubbishing property on a property forum. Just sit back,save and wait for things to improve. If that's what you believe will happen.It's a fact that house price growth is not linear so why would we expect house price to wage ratios to be linear.
Well, I'm sure you could do it too, so long as you have a full time job and a deposit, however you might not like the house, the suburb or the fact that you might have to live on a tight budget, which is exactly what I did 23 years ago.
I bought my first place 6 years ago on less then 30k
house had 3 bedrooms plus huge rumpus room/office downstairs 4 car spaces half acre 20mins to a regional city with a population over 60,000 and the main regional centre for the mining hub.
There is places anyone can afford to buy
invest where it makes sense rent where you want to live.
Who cares what the 'average' person wants? You can just buy in affluent places where the rich people like to reside and that's where your possible capital gain comes from
Where did I rubbish property, or claim I know what will happen? I don't know what will happen. The situation might get worse. Given the ineptitude of our governments I wouldn't be surprised if houses became even more unaffordable. That doesn't change the fact that they are more unaffordable now than they used to be.
...and that's what makes RE such a great investment vehicle!
Pieman, that's a bit harsh. Different Here has only been with us for a few minutes, after all, and is probably not used to the full and frank assaults we engage in with each other.
Different Here, are you a student by any chance? We see a number of kids here come and go; mostly in shock at their own seemingly-distant ownership prospects, and the discussion always takes the same route: disbelief, incomprehension, emerging comprehension, half-baked hope, deepening personal reflection, explicit commitment to study harder and get into a career, too much time wasted on SS talking about piffle instead of studying, bad grades, silence.
I hope you are Different Here.
Different Here, are you a student by any chance? We see a number of kids here come and go; mostly in shock at their own seemingly-distant ownership prospects, and the discussion always takes the same route: disbelief, incomprehension, emerging comprehension, half-baked hope, deepening personal reflection, explicit commitment to study harder and get into a career, too much time wasted on SS talking about piffle instead of studying, bad grades, silence.
I hope you are Different Here.
