Is Sydney unaffordable? Reality or expectations.....

That article is pure data manipulation. Houses in Sydney and other OZ cities are several hundreds of sqm of land. Houses in HK, SG and many others are tiny shoes box apartments. Pear vs apple comparison.

 

I'd agree with @BoatArrival that Sydney is a bit more expensive than the Bay Area. The median there is around $1.1 million (AUD), and is largely driven up by tech salaries.

I'm not sure how the median salary in the US and Australia compares. I believe that the minimum wage is lower, but professionals earn more.

GDP per capita is between $55K to $60K in the US, and $50K to $55K in Oz, so there's not a huge difference.

 

That is what I was alluding to in my post last week.

There is a graph in the ABC unaffordability article that has an incorrect headline. It states "Australian cities " and then goes on to show Sydney on one line matching the headline (12.9x) and most of the other cities at less than half that amount (<6x).


PHOTO: Australian house prices have surged to become 12.9 times higher than median household incomes. (Supplied: Demographia)

 

But... Australia is Sydney. Didn't you know that Ms. Angel?

 

I used to think Sydney was overpriced in 2012

 

If the demand is there then its not overpriced. Just because 1 or many groups of ppl can't afford something doesn't automatically make it overpriced. Some people think a Lamborghini, Chanel, Hermes, Cartier etc are overpriced yet they are still in business. It's because the demand is strong enough to sustain prices . Same thing with anything we buy or sell. It's all about demand and supply . Just because 1 group ( regardless how large) of people think something is overpriced doesn't actually mean it is overpriced IF there is demand for it and especially if the demand outstrips the supply.

Me 2 cents.

 

You're right Leo. I wish you weren't!

I've never forgotten how hard it was for us to get a place for 400k. I really feel for the young uns looking at 600k right out of the gate in Sydney.

The demand is obviously there and they will manage to make it happen but It must put a huge strain on everything.

For a FHB its around $900 a week (Inc rates bcorp etc).

Tough going for childcare workers, labourers, drivers and a zillion other essential jobs where average wages are 800-900 per week after tax.

 

But it's overpriced when you use basic metrics like price to wage income or gross yields. As well as comparison to overseas or the rate of recent price increases. I still blame nimbies and councils who restricted supply up till 2012 leaving the city unprepared when the various demands surged at once.

But prices have gone too far. Believe me a unit in Auburn is no Tiffany diamond ring or Lamborghini.

 

Yes... my first property was a very basic unit in West Ryde. $252k. The mortgage was only just ok for me. Now that property is ~$600k. Interest rates are down. But the FHB would have to:
a. Have a larger deposit than I did
b. Have a much larger loan.
Interest rates have come down a lot, but I only had a $200k mortgage vs. a current buyer would have say a $500k mortgage for that same property...
I would not be comfortable having a 500k OO mortgage on a single income. And this is middle ring "entry level" no frills or bells living.

 

A bargain is a comparison between similar goods, inner Sydney is not comparable to a fringe suburb (there are many more cafes/km² in the inner city though not per capita)

Nor has productivity, there is no justification to increase wages If output isn't increased to offset the employer's costs. They don't care If YOUR rates, water, rent, electricity, gas, mobile phone plan, netflix/stan, fuel, tolls, education costs etc have increased - you aren't turning out more widgets, their sales prices haven't increased at the same rate tge cost of their other inputs so their margins are being squeezed. The next step for many is to offshore their skillbase (cheaper labour, cheaper rent, cheaper..... but transport and establishment costs need to be weighed up) and to increase their profitability and the loss of local jobs.

I like Kuraba Point but I can't afford it either To paraphrase a previous member for North Sydney - '...up-skill & get a better paid job'.

 

Agree mate re syd and Melb wont be easy for many, though it never was easy . Gonna need 2 incomes, good jobs etc. Or move to other states, or locations in NSW.

 

As an aside these gig jobs are not sustainable in terms of buying a house or supporting a family. They are terrific as a low cost-of-entry job for emergency wages or to supplement your main job. But you won't buy a house on basically a modern high tech version of pizza delivery. Skill up

 

I guess baby boomers will eventually have to sell

 

... or hand down to kids... wealth gap/inequality widens...

 

It also brings wages down in other areas as they try and compete with the gig economy.
Its not that easy when your competing with workforce that does not pay much in the way of tax and doesn't have to pay super.

 

i'll add my 2cents to your 2 cents to make it 4 cents xD.

(from the top of my head) with the exception of versace, Rolex, Patek phillip and Audemars Piguet, and diamond "jewelers who are really diamond dealers and jewelry makers so they play by different rules"

Every other genuine "luxury" brand is owned by an Organization and not owned buy their founding family anymore because they are not profitable. that includes car, jewelry, watch, handbags, clothes, etc. even the most iconic such as ferrari and porsche had to sell. china definitely helped with age of social media.. but for most their business is no where near as successful as their branding. without these organizations buying them.. most would have gone bust..

essentially there are 2 or 3 groups in each industry that owned 80% of all the companies in their respected industry, and most of them sold/bought because its not sustainable.

Its not the same as "property", which is in this term is individually/private equity owned.
one common factor they have is.

they are all bought with debt & overpriced !! (insert salt)

sorry i sort of moved away from the title. but i thought its important for some to understand that not everything is created equal.

 

I'll add 2 more cents to make it 6 cents

All comes down to supply and demand.

 

I will add another two cents to make it 8cents

Starting to sound like a go fund me page ...

 

Hi is your IP a holiday rental

 

Yes. And rarely any vacancies.
There is quite a lot of competition around though.