Peninsula housing affordability problem won't go away
Housing affordability is a hot topic.
It is a massive problem in Australia, particularly in Sydney which now ranks number two in the world for unaffordability with average house prices 13 times average gross household incomes.
Hong Kong is the most unaffordable, then Sydney and then Los Angeles in the latest report published by global analysts Demograhia and reported by the ABC.
Hong Kong gets a score of 29, Sydney 13 and Los Angeles 9.
New York is down at six.
What this means is that it would take a first time buyer in Sydney almost 10 years to save for a 20 per cent deposit if they spent 40 per cent of their net income on savings alone.
It's unsustainable and the picture with units is not that much better.
So what about the Peninsula?
Is housing more affordable here?
Well it isn't.
The Peninsula's affordability index is just the same as Sydney's.
It's 13 and this is based on reliable data, not hearsay.
It uses the latest Bureau of Statistics data and data from realestate.com.au based on actual purchases.
It's not an opinion poll.
Look at it like this.
The whole Peninsula of Woy Woy, Blackwall, Ettalong, Booker Bay and Umina ranks at the top of the global hot list of unaffordable housing.
Forget the real estate hype. This is a real crisis.
The problem is twofold.
Yes, the rising prices of housing play their part but so too does the very low level income levels on the Peninsula.
How can you afford to buy a $720,000 house if your household income before tax is about $60,000 a year?
How can you pay close on $20,000 or more a year on rent if your household income after tax is less than $50,000 a year?
Interest rate increases are around the corner.
The problem will get worse.
But some talk about rising house prices with pride: "Look at what my place is worth now".
While others, especially younger people, talk about it with despair.
The Peninsula has a massive housing affordability problem and it won't go away.
If we ignore it, it will only get worse.
There are solutions but these require a clear rethink on what we want the Peninsula to be.
It's a fabulous part of Australia but a door, once open, is now shutting for far too many.
Email, 23 Jan 2018
David Keig, Umina