I think, but am not sure, that the average income is around $80k these days. You can buy a home in 2770 for just under $300k, or in 2560 for just over $300k. Both these suburbs are around an hour commute by train.
Investors keep first-timers out of market
- Thread starter MsAli
- Start date
Pretty much bang on: http://www.abs.gov.au/ausstats/[email protected]~State+&+Territory+Earnings?OpenDocument + http://www.abs.gov.au/ausstats/[email protected]+2013~Main+Features~Key+Figures?OpenDocument
It's interesting to compare the state-by-state avg earnings to property prices in each state.
Is it expectations that have grown, making it harder for the younger generation to buy a first home?
I disagree with you in that you cant compare what is average then and now. You or your parents bought what was average then, not below average as a first home, so why by todays standards cant a fhb buy what is average today?
The houses are bigger today but the land is smaller, so todays younger ones gain a bit and give a bit as well for substantially a lot more then the average salary as a ratio.
I bought my first house in 2002 as a single parent. The house was in the last suburb in Canberra and was the cheapest house I could find. Income to house price ratio of 5.4 : 1
Sold and upgraded in 2005.
I bought my first house again (same house) in 2011 as an IP. This time my income to house price ratio was 3.8 : 1 .
Household income now, that house would be 1.8 :1
I should also ad that my gen Y colleague who complains she will never be able to buy a house would also have a household income ratio of 1.8 :1 and would not even consider that house or that suburb (where i still live).
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I don;t think there is an affordability problem. You can buy a $350,000 property with $30,000. If you get your priorities right, in my view, that is not very difficult. Of course it requires some sacrifices, but what do you want?
I often see that the people who complain about property affordability, expend good amount of money in cars, clothes, dining out, etc. They also talk about properties in upscale areas.
Regards,
Roberto
I often see that the people who complain about property affordability, expend good amount of money in cars, clothes, dining out, etc. They also talk about properties in upscale areas.
Regards,
Roberto
good point,
its like comparing dial up modem speeds vs broadband speeds I guess in a sense,
that being said the amount spent on internet per month I assume would be similar including CPI increases..... however I do remember paying over $50 per month for a dial up service years ago, (and also getting a $500 bill for going over downloading too much stuff)
that being said, 15 years ago, most people didnt have internet, no phone and no ipad,
now a mobile is a necessity and so is internet, I still dont agree that a separate ipad installment for the unit AND data is a necissity
How did that happen? how much have wages gone up or properties gone down?
I think you are stating your income ratio. What about the national or Canberra average wage? compared to the average house price? You could be the top neurosurgeon for all I know.
The link below shows since 1985 to 2010 there has been a widening gap between average income to average dwelling costs. Bearing that in mind fhb'ers of today also have the problem of proportionally a much larger loan for their home, so longer to pay it off.
http://www.rba.gov.au/publications/bulletin/2012/dec/pdf/bu-1212-2.pdf
It was always tougher back then when the tin roof leaked and it was a hike to the backyard dunny.
Thank you for your assumptions. My first PPOR was well below average. It was all I could afford, but it was mine.
How did that happen? Easy, my life is not based on averages
I had a very low income (way below average) when I bought my house. I was just starting in my career. I've had lots of payrises and promotions (i am a middle manager in a large organisation, however I have no qualifications - nothing special and definitely not a neurosurgeon).
My income has more than tripled since 2002, whereas that house has only doubled.
My point is, as life goes on things become easier...you progress in your profession and your income goes up. Depending on what you do, very rarely will your income be exactly 'average'. Stop looking at averages and look at your situation.
Is it expectations that have grown, making it harder for the younger generation to buy a first home?
Those exact houses still exist and FHB ARE buying them.
I disagree with you in that you cant compare what is average then and now.
You or your parents bought what was average then, not below average as a first home, so why by todays standards cant a fhb buy what is average today?
Not sure what you mean by 'average' so I'll assume you mean median. It was difficult then to by at median or above particularly as interest rates were so high.
I'd go as far as saying todays FHB would find it easier so long as they don't want to live in Potts Point.
There are lots of affordable 3/2/2 around now below median if you want to live in the suburbs.
Son has 2 young single friends who have bought 3/1/1 houses 8k and 15k from the CBD on full sized blocks.
I know others have done the same, it's just they're not of the same caliber home that their parents live in NOW. They're of the caliber of my second home and they're single.
my first home was the cheapest I could find and all that I could afford. Bank knocked me back the first time as I was single female.
my second home bought as a couple was probably more what 2 income FHB could afford then.
Both are nowhere near 8x the income, so with interest rates being low FHB could probably afford better {the renovated version as opposed to our unrenovated would be easily affordable at 400K 8km from the CBD - just that it has no cafe strip
The houses are bigger today but the land is smaller, so todays younger ones gain a bit and give a bit as well for substantially a lot more then the average salary as a ratio.
You have that as well as the opposite. I think the young have an even bigger choice now. There's nothing stopping the more realistic ones from buying up, and just because there might be a large percentage of higher caliber homes about doesn't mean FHB deserve to afford them - that others paid heaps building, extending and renovating when they could afford it.
SMH articles
This thread started with this article from SMH.
http://www.smh.com.au/business/inve...of-market-as-prices-surge-20131112-2xd5o.html
Yet another article has appeared in SMH.
http://www.smh.com.au/business/prop...dream-a-nightmare-to-fund-20131115-2xmf5.html
(The thread is so long and I could have missed some posts so probably second one is already mentioned in this thread.)
This thread started with this article from SMH.
http://www.smh.com.au/business/inve...of-market-as-prices-surge-20131112-2xd5o.html
Yet another article has appeared in SMH.
http://www.smh.com.au/business/prop...dream-a-nightmare-to-fund-20131115-2xmf5.html
(The thread is so long and I could have missed some posts so probably second one is already mentioned in this thread.)
How did that happen? Easy, my life is not based on averages
I had a very low income (way below average) when I bought my house. I was just starting in my career. I've had lots of payrises and promotions (i am a middle manager in a large organisation, however I have no qualifications - nothing special and definitely not a neurosurgeon).
My income has more than tripled since 2002, whereas that house has only doubled.
My point is, as life goes on things become easier...you progress in your profession and your income goes up. Depending on what you do, very rarely will your income be exactly 'average'. Stop looking at averages and look at your situation.
um, just because you expereince something, doesnt mean its the norm
I didnt think people on here were that naive
what sort of a fully qualified doctor cannot afford a deposit, unless they are going for a 1.5m house or a loan with 30% LVR?!?!?!!?!?!?!
especially saving for 4 years
How did that happen? Easy, my life is not based on averages
I had a very low income (way below average) when I bought my house. I was just starting in my career. I've had lots of payrises and promotions (i am a middle manager in a large organisation, however I have no qualifications - nothing special and definitely not a neurosurgeon).
My income has more than tripled since 2002, whereas that house has only doubled.
My point is, as life goes on things become easier...you progress in your profession and your income goes up. Depending on what you do, very rarely will your income be exactly 'average'. Stop looking at averages and look at your situation.
Why not look at the averages? Or mean, isn't that where most people are at?
It is pretty simple really, the median house price and median household gap is widening. So how does that make it easier?
I am not having a dig at the older people here, I am not that young either and my first place was something I could afford to buy, which was about 1:2 ratio with my salary. But my salary was above the median and what I bought was below average.
People on Somersoft do have a different mindset to the masses who are only trying to buy their one and only ppor.
I didnt say i was the norm...actually i think I started very much below the norm.
I was simply giving a real life example.
I wasn't having a dig at you, the perception of the norm has changed over the years. When I grew up it was normal to have 800m sq block with a house on it in the suburbs. When me dad grew up it was normal to have a smaller house closer to the city on 1000m sq block, now when my boy is growing up it is normal to have 450m sq block with a larger house further out from the city again.
By definition, there are plenty of people above and below the average.
I think what many people here are saying is that when they started they didn't buy 'the average' house, they bought the cheapest house - big difference.
Pretty close to the same amount of households on either side of the average.
Sure, same with houses. Therefore there should be plenty of houses cheaper than the average. FHB's should just stop whinging and buy one of those.
Agreed.
It is more likely to be easier to get a loan to buy one of these now compared to 30 years ago. I believe the purchase price to be comparatively more expensive though.
Like any generation, many will think it is too hard.