Perth home affordability.

[Guest]

yeah! I've got tons of the stuff lol!

 

Where do you get it from? I went to Uni in Sheffield so very fond of the stuff!

[legoman]

I'll wait for the downturn which will come to Perth, at 50 last thing i need is a 30 year mortgage. sell my uk house ( would have been mortgage free there years ago ) as property rises then poss buy here when house prices are realistic. We are over the 4 x 2 with pool idea, kids are all near left home so a 3 x 1 established property with large garage and garden will suit us.

[flag of convenience]

I'd say the housing is very affordable.

 

$750 a week, over 30 years gets you a 550,000 loan at 5.8% .. (just did the sums on the ANZ site, at 5.3% it's just over $700 a week).

 

550,000 when you add a 20% deposit will get you a place in all but the best suburbs.

 

No way out of whack. House prices are too high. Regardless of interest rates, which as sure as night is day will rise no doubt catching another generation out big time. The rot is entrenched and as bubbles were not allowed to deflate the future is very uncertain. Industry will always attempt to talk the situation up, but once prices go up to take into account falling interest rates, then what? There will be little power left in the keg for any further housing stimulus.

 

Only good time would be a 25% reduction in prices at least.

[flag of convenience]

Well I just went on Realestate.com.au and looked at Perth and under $500k. There are thousands of them.

 

Check out where though.

[Incata]

You try to find a house for under $500k. We have just had a bill from our settlement agents brought for just over $550k...over $12.5k stamp duty. We were lucky enough to stay with family and save large amounts over a short space of time.

 

Look in Craigie and Padbury. Nice areas both with many houses under $500k.

[tinaisrar]

First time buyers pay no stamp duty under 500k, and only pay 100% over 600k (it's a sliding scale). So that can help.

 

Why wouldn't they have a deposit? It'll either be equity out of their old house, or it will be savings while living at home and/or paying less in rent, or for the younger ones assistance from the bank of Mum & Dad.

 

 

Using the figures above.

 

If your weekly wage is $1600, that's over $5k a month after tax, take $3k away for rent and living. That's $2k a month saving. So $25k a year. 6 years and you have your $110k deposit and $30k stamp duty.

 

wish it was that easy to save that amount in years, not many would manage that even if living at home people will still have many expenses. Yes they can save but realistically life gets in the way to be so regimented. Also the bank of mum and dad for many is not a huge pot!

[Guest JK2510]

A 4x2 under $500k in a decent area. Not around here

[Bibbs]

Only good time would be a 25% reduction in prices at least.

 

They were saying the same about the UK. And I've read that over there house prices have gone over the peak of 2008 (pre-crash). I think on average they dropped about 10%.

 

Check out where though.

 

Yeah, but first time buyers have to be realistic. They'll not get a 4 bed house on Cott beach for 200k anymore.

 

It's called a housing ladder, you start at the bottom and work your way up.

 

Compare the UK. Avg house is now 230k which is is about x9 the average salary (26k I think).

So Perth is house 550k and x6.5 (83k salary).

 

And even if you are not in a nice area on Perth, even the worst places are a step up from some of the holes in the UK.

[Bibbs]

A 4x2 under $500k in a decent area. Not around here

 

Now you are changing your requirements.

 

Seeing as though 500k is the *average* .. you'd expect that smaller houses in worse areas to be under the average, and bigger houses in nice areas to be above it. Wouldn't you?

 

Don't have 500k, then get a smaller house or live is a not so nice area. It's not difficult. Spend within your means.

[Bibbs]

but realistically life gets in the way

 

So people have different priorities. If you want that kinda deposit for that kinda house. Work to it and stop spending your money on other things.

 

If you would rather have *stuff* and go out partying and a smaller house, then spend it on *stuff* and partying.

 

It's not rocket science.

[fifi69]

Where do you get it from? I went to Uni in Sheffield so very fond of the stuff!

 

We too are never without a bottle in the cupboard. You can buy it loads of places here, from the smaller british shops, IGAs and also some Coles supermarkets stock them. Normally pay $5/6 a bottle.

 

if you can't find any near you. Give me a shout and I shall post some over:biggrin:

[Guest JK2510]

The average house is over that price. A bit judgemental really aren't you bibbs,you know jack all about my personal situation! Believe me I live within my means and I'm also I. Touch with the reality. Anyhow I have brought a house now. I have never changed my requirements. I will refrain from using the language I really want to use.

[Xenon4017]

 

Compare the UK. Avg house is now 230k which is is about x9 the average salary (26k I think).

So Perth is house 550k and x6.5 (83k salary).

 

 

 

Where did you get those figures from? 83k looks a bit high, given that the national median is below 60k (http://mattcowgill.wordpress.com/2013/05/13/what-is-the-typical-australians-income-in-2013/)

 

And the average for the uk is more like 30k.

 

I don't disagree with your sentiments about living within your means, but I think your calcs are out on this one, and that house affordability in all Oz cities is out of kilter with the economy as a whole.

[Bibbs]

The average house is over that price. A bit judgemental really aren't you bibbs,you know jack all about my personal situation! Believe me I live within my means and I'm also I. Touch with the reality. Anyhow I have brought a house now. I have never changed my requirements. I will refrain from using the language I really want to use.

 

First you said : You try to find a house for under $500k.

I said : Well I just went on Realestate.com.au and looked at Perth and under $500k. There are thousands of them.

You then said : A 4x2 under $500k in a decent area.

So you added in '4x2' and 'decent area' to your first statement. That's what I meant by 'changing your requirements'. I don't have a clue where you live or what your house is like. I wasn't commenting on stuff I don't know about. I was commenting on the statements you'd made.

 

I'm not judgmental. Apart from the fact I don't understand why people are surprised that above-average houses, in above-average areas cost above-average money. And if you earn a below-average salary, you'll have to save damn hard to make it affordable.

 

Where did you get those figures from? 83k looks a bit high, given that the national median is below 60k (http://mattcowgill.wordpress.com/2013/05/13/what-is-the-typical-australians-income-in-2013/)

 

And the average for the uk is more like 30k.

 

I don't disagree with your sentiments about living within your means, but I think your calcs are out on this one, and that house affordability in all Oz cities is out of kilter with the economy as a whole.

 

I got 83k from the first post, with a link, where is said $1662 a week was the average wage. Which I admit isn't 83k (I'd taken $1600 a week x52 as a rounding) .. it's actually $86,424

 

I can't find a stat on UK salaries (I've quickly googled). but this link :-

http://www.express.co.uk/news/uk/394547/Mr-and-Mrs-Average-live-on-16-034

Says it's 16k a year after tax .. and this :-

http://www.bbc.co.uk/news/business-20442666

says 26.5k before tax. But I can't believe the average person pays 10k in tax.

[Xenon4017]

But I can't believe the average person pays 10k in tax.

 

That's where the term "average" is misleading. Obviously the average tax paid figure is heavily skewed by a small number of high earners who pay a lot of tax. A better measure would be median tax paid.

 

Same deal for the average WA wage. This is for full time positions, and is the mean not median. Even so, it's higher than I expected.

 

And of course, your measure of affordability was "how many years would I have to work (without paying tax) to buy a house", which is a valid way to compare two different markets. The question is though, how does the WA market today compare to the WA market of 10 years ago, or 50 years ago. (House quality has changed, I know).

[Bibbs]

That's where the term "average" is misleading. Obviously the average tax paid figure is heavily skewed by a small number of high earners who pay a lot of tax. A better measure would be median tax paid.

 

Same deal for the average WA wage. This is for full time positions, and is the mean not median. Even so, it's higher than I expected.

 

And of course, your measure of affordability was "how many years would I have to work (without paying tax) to buy a house", which is a valid way to compare two different markets. The question is though, how does the WA market today compare to the WA market of 10 years ago, or 50 years ago. (House quality has changed, I know).

 

The 10k in tax I meant was the difference between the two articles I linked, where one said 26.5k as Gross, and the other as 16k Net.

 

Yup, full time positions. So if you are a couple and both work, a nice deposit should be achievable if you save. If you are a one (low) income with kids and a stay at home parent, I've no idea how you would get a house. But then it's the same all over the world.

 

vs 10 years ago .. it's a lot different. It's now twice the price for half the land. I can't see it improving.

For an idea look at the places that are a good distance further outside the train lines (Yanchep, Bunbry, Mundaring).

 

It'll keep getting higher and higher density living. At least people are not living in garages yet (unlike Bradford was it?).

[newjez]

Average house price in the UK is not £230. That may be London and the south east, but it is not UK wide.

 

They were saying the same about the UK. And I've read that over there house prices have gone over the peak of 2008 (pre-crash). I think on average they dropped about 10%.

 

 

 

Yeah, but first time buyers have to be realistic. They'll not get a 4 bed house on Cott beach for 200k anymore.

 

It's called a housing ladder, you start at the bottom and work your way up.

 

Compare the UK. Avg house is now 230k which is is about x9 the average salary (26k I think).

So Perth is house 550k and x6.5 (83k salary).

 

And even if you are not in a nice area on Perth, even the worst places are a step up from some of the holes in the UK.

[Bibbs]

Average house price in the UK is not £230. That may be London and the south east, but it is not UK wide.

 

You are right, sorry. I must have missed the "London" in the article I'd read this morning.

 

http://www.independent.co.uk/property/uk-house-prices-continue-to-rise--average-home-now-worth-169624-8747692.html

 

170k / 26k = 6.5 (house / salary = multiplier).

550k / 86k = 6.4

 

So quite comparable .. if the "averages" are the same type.

 

 

EDIT -

This was the article that gave me the 230k, but it doesn't seem to mention a location. Maybe the "reporting firm" is London centric :-

http://www.themovechannel.com/news/stories/sales-soar-as-uk-house-prices-almost-return-to-2008-peak/#.UiAJkjamh8E

 

The firm's latest index reveals that prices rose 0.6 per cent in February to £229,544, 3.7 per cent above last year and just 1 per cent off the previous peak recorded in February 2008.

[fourcorners]

Median Australian wage for full time workers is $57,400, when you include part time workers it's $46,900. (http://mattcowgill.wordpress.com/2013/05/13/what-is-the-typical-australians-income-in-2013/)

 

$550 / $57 = 9.65

 

Not so affordable....

[Bibbs]

Median Australian wage for full time workers is $57,400, when you include part time workers it's $46,900. (http://mattcowgill.wordpress.com/2013/05/13/what-is-the-typical-australians-income-in-2013/)

 

$550 / $57 = 9.65

 

Not so affordable....

 

Why use the Median? Why not the Mean?

Why include part time workers? I doubt that households with only one part time worker are a large percentage, I'd assume an average closer to 1.5.

That's for all of Australia, not Perth.

It's from 2011.

 

Median House price in 2011 (in Perth) was $477k (June 2011). Not a lot less, but considerable.

http://www.watoday.com.au/business/property/perth-to-set-new-record-for-property-price-decline-20110916-1kd5n.html

Perth's median house price at June was $477,000, according to REIWA's final data

.

But anyway .. I feel housing is as affordable as anywhere in the 'West' (except some places in the US/Canada) and comparable with the wages/opportunities available. Others don't.

Typically, I can only find Perth CBD stats from 2011 for wages, not the metro area.

http://www.censusdata.abs.gov.au/census_services/getproduct/census/2011/quickstat/503021041

Says Median of 88k.

[Guest]

Why use the Median? Why not the Mean?

Why include part time workers? I doubt that households with only one part time worker are a large percentage, I'd assume an average closer to 1.5.

That's for all of Australia, not Perth.

It's from 2011.

 

Median House price in 2011 (in Perth) was $477k (June 2011). Not a lot less, but considerable.

http://www.watoday.com.au/business/property/perth-to-set-new-record-for-property-price-decline-20110916-1kd5n.html

Perth's median house price at June was $477,000, according to REIWA's final data

.

But anyway .. I feel housing is as affordable as anywhere in the 'West' (except some places in the US/Canada) and comparable with the wages/opportunities available. Others don't.

 

Median is better because it is more likely to reflect the average person rather than being skewed by those at the top

[WeegieDave]

Median Australian wage for full time workers is $57,400, when you include part time workers it's $46,900. (http://mattcowgill.wordpress.com/2013/05/13/what-is-the-typical-australians-income-in-2013/)

 

$550 / $57 = 9.65

 

Not so affordable....

 

When you look at it like that it's scary!!

 

Perhaps Aus will become like some countries abroad and people will be forced to rent all their days as mortgages will become out of reach financially?

[fourcorners]

At any rate, I would want to spend half a million dollars on a house that is only designed to have a lifespan of 17 years. I can't recall where we read about it but new houses are not built with longevity in mind. I especially hate the 'Perth' style house with no roof overhangs and poor air circulation, and a lack of green spaces around them to absorb the heat.

 

They don't represent good value when you compare them to new homes in other 'westernised' countries.

[jen85]

At any rate, I would want to spend half a million dollars on a house that is only designed to have a lifespan of 17 years. I can't recall where we read about it but new houses are not built with longevity in mind. I especially hate the 'Perth' style house with no roof overhangs and poor air circulation, and a lack of green spaces around them to absorb the heat.

 

They don't represent good value when you compare them to new homes in other 'westernised' countries.

 

I think it depends on the builder but I do agree with you, they need to take ideas from other countries and adapt them here however it must suit the climate.

[flag of convenience]

Plenty of us like that now credit is cheap. But you only have to go back a generation or two and you find that most people saved before buying.

 

But then again they were not distracted by iPads & handbags.

 

Very true. We live in a far more materialistic society in more recent times. We are encouraged to spend and credit spurs this on. Like many things those house prices are still over inflated and far too much industry hype around it.