Demographia calculates that 57% of the average income is needed to pay the mortgage on the average Sydney home.
Australia has the least affordable houses in the world. In Demographia's Sixth International Housing Affordability Survey, 22 of Australia's 23 regions were labelled Severely Unaffordable. The survey doesn't identify the missing region, presumably it is Christmas Island.
The Housing Industry Association (which represents the property development industry) points out that the average Australian house price is now $485,000, requiring a monthly repayment of $3100. "That is well out of reach of most first home buyers," says Matthew Quinn, CEO of property developer Stockland.
I remember way back in the very distant past when I was looking to buy my first house, I was not looking for an "average" house, I was looking for something I could afford! Yet now we know several young couples, not yet even married, who have recently bought new or nearly new two-storey multi-bedroom properties, on the (misguided?) advice of their parents and ignoring the inevitable imminent rise in interest rates. Has Kevin Rudd really done those young people a favour by conning them into buying more than they will be able to afford?
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