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Is housing unaffordable in Australia? In Sydney, the most expensive city, a small apartment rents for $500/wk. national min wage is $24/hr, or $813/wk after tax

Is housing unaffordable in Australia? In Sydney, the most expensive city, a small apartment rents for $500/wk. national min wage is $24/hr, or $813/wk after tax, but most jobs will pay more in sydney. Or you could live in a cheaper city earning min wage.

scarab92 2y ago
That perspective makes sense in America where there is a strong supply response to increasing prices. In America, enough housing physically exists such that, it's typically just a matter of price. In Australia, the population increased so suddenly after covid, that we just haven't been able to build enough houses quick enough to stop homelessness. For context, at current occupancy rates, our housing industry is building enough new homes for about 240,000 additional people per year, but our net migration is about 600,000 per year. Unlike in America, most of our homeless population does have full time jobs, it's just that there are hundreds of people applying for every available property which means it often takes many months to secure one. Prices are increasing, and will eventually find a new higher equilibrium, but it's going to take years to build enough housing to solve our homelessness problems.
- cpncrunch 2y ago
  >For context, at current occupancy rates, our housing industry is building enough new homes for about 240,000 additional people per year, but our net migration is about 600,000 per year. That is certainly a problem that needs to be fixed, but my point was just that housing is not unaffordable at the moment. >there are hundreds of people applying for every available property which means it often takes many months to secure one. I find that hard to believe in general. If that was the case then prices would simply increase to match demand. You will always get news stories like this, but it doesn't apply to all properties. Probably just subsidized rent, or underpriced ones. If you go for the slightly overpriced properties, I'm guessing you won't have to compete with hundreds of buyers.
averageRoyalty 2y ago
61% of your wages going to rent (not even a mortgage) doesn't scream "affordable housing" to me. And although remote working normalisation has changed things a bit in some industries, most jobs are concentrated in cities and the cost of living in or near a city is much higher than (for example) the US.
- cpncrunch 2y ago
  Average wage in Sydney is much higher than minimum wage.
  - lmpdev 2y ago
    Median wage in Sydney is not exceptionally high though
    - cpncrunch 2y ago
      But still more than enough to pay for housing on less than half of post-tax income. Median salary is $1250/week in Australia, and presumably higher in Sydney.
      - lmpdev 2y ago
        Sydney is $1,300/w pretax which is ~$1,050 net And median Sydney rents just hit $745/w So approximately 70% of median income is lost to rent each week for a median single income household Similar story for me personally in Brisbane
        cpncrunch 2y ago
        You can rent for below median though.
        averageRoyalty 2y ago
        You've missed the point though. Yes you can get above median wages and below median rent, but in a highly competitive market (low unemployment, low housing supply) you probably won't. Even fudging the numbers so 50-60% of your post tax income is rent doesn't leave a lot on the table for savings, other (high) cost of living expenses etc. Additionally, median wage is a reach for those in their first 5-10 years of career, but the jobs are still highly focused in cities.

scarab92 2y ago

That perspective makes sense in America where there is a strong supply response to increasing prices. In America, enough housing physically exists such that, it's typically just a matter of price. In Australia, the population increased so suddenly after covid, that we just haven't been able to build enough houses quick enough to stop homelessness. For context, at current occupancy rates, our housing industry is building enough new homes for about 240,000 additional people per year, but our net migration is about 600,000 per year. Unlike in America, most of our homeless population does have full time jobs, it's just that there are hundreds of people applying for every available property which means it often takes many months to secure one. Prices are increasing, and will eventually find a new higher equilibrium, but it's going to take years to build enough housing to solve our homelessness problems.

cpncrunch 2y ago
>For context, at current occupancy rates, our housing industry is building enough new homes for about 240,000 additional people per year, but our net migration is about 600,000 per year. That is certainly a problem that needs to be fixed, but my point was just that housing is not unaffordable at the moment. >there are hundreds of people applying for every available property which means it often takes many months to secure one. I find that hard to believe in general. If that was the case then prices would simply increase to match demand. You will always get news stories like this, but it doesn't apply to all properties. Probably just subsidized rent, or underpriced ones. If you go for the slightly overpriced properties, I'm guessing you won't have to compete with hundreds of buyers.

averageRoyalty 2y ago

61% of your wages going to rent (not even a mortgage) doesn't scream "affordable housing" to me. And although remote working normalisation has changed things a bit in some industries, most jobs are concentrated in cities and the cost of living in or near a city is much higher than (for example) the US.

cpncrunch 2y ago
Average wage in Sydney is much higher than minimum wage.
- lmpdev 2y ago
  Median wage in Sydney is not exceptionally high though
  - cpncrunch 2y ago
    But still more than enough to pay for housing on less than half of post-tax income. Median salary is $1250/week in Australia, and presumably higher in Sydney.
    - lmpdev 2y ago
      Sydney is $1,300/w pretax which is ~$1,050 net And median Sydney rents just hit $745/w So approximately 70% of median income is lost to rent each week for a median single income household Similar story for me personally in Brisbane
      - cpncrunch 2y ago
        You can rent for below median though.
        averageRoyalty 2y ago
        You've missed the point though. Yes you can get above median wages and below median rent, but in a highly competitive market (low unemployment, low housing supply) you probably won't. Even fudging the numbers so 50-60% of your post tax income is rent doesn't leave a lot on the table for savings, other (high) cost of living expenses etc. Additionally, median wage is a reach for those in their first 5-10 years of career, but the jobs are still highly focused in cities.