ABCDiamond

November 2009 figures from ABS, for Tasmania.

Average loan size for New First home buyer Mortgages = $189,800
Adult Male Total Weekly Gross Earnings = $59,608 per year.

Mortgage to Wage multiple = 3.18 for Tasmania or 2.22 if a partner is also working part time (50% of full time income)

Northern Territory is the other extreme with 3.31 or 4.63 multiples.

Deutschmaster

Meanwhile in the parallel universe of Melbourne, houses tend to be around the $500,000 mark and I'd say that the mean wage isn't that much different from that in Tasmania.

A pokey (sorry cosy using agentspeak) 1 bed flat on the outskirts around $200,000

coolshadows

That's pretty low for Australia. I wonder what they are buying?

I've been looking at what I can get with a $250k mortgage (+44k deposit = $294k) around Adelaide South for a family of 4 in a good area, and I've yet to be impressed (i.e. everything we have looked at needed a lot of money thrown at it before we'd be happy - like replacing the 20yr old kitchen ).

We are now holding off, and saving all we can so we can afford somewhere that is similar to the cheap rental we are in (or near as good as the house we left in the UK) - crazy .

Of course, house prices are still increasing at a phenomenal rate here (around 20% annually!!) and though I'm earning way more than $2 for every £1 I was earning in the UK (and I thought I was well paid there ), I now realise I need to be earning a lot more! .

bcworld

Does the average first home buyer, earn the average adult male weelky gross earnings? If not, these multiples are fairly meaningless.

coolshadows

from a (skilled) migrant point of view you should be earning way more than the stated average wage anyhow, so I think ABC is right to make the statement in reference.

IndieG

And a 1bed room apartment in South Yarra advertised with a price range $380k-$450k was sold for $675k. Madness

bcworld

Only if you are also a first home buyer.

coolshadows

yep, it's 'what you get for your money' that concerns me. Especially when compared to rentals.

It feels like the property market is purely built on speculation, rather than any real value for money.

coolshadows

aren't most (skilled) migrants?

BadgeIsBack

I've wondered that. That the average mortgage is lower than you might expect. I am forced to concede that people always have more money to put down on a house than you realise - they've inherited it, they've been down the mines, or in Europe amassing a deposit - they've moved up the property ladder a step at a time starting 15+ years ago etc....

bcworld

There is nothing rational about the property market in Melbourne at the moment that's for sure.

bcworld

Buying their first Australian home yes, but most seem to bring equity from a previous house sale with them...that's why there are threads thousands of posts long with people agonising over the exchange rate.

coolshadows

IF they manage to sell, and IF they have any equity left.

JAJ

So-called "negative gearing", which allows an investor to offset a passive income loss (eg a rental loss) against earned income, is almost unique to the Australian tax system these days.

It rewards those who take on high levels of debt to fund investment, and penalizes those who take a more conservative/responsible approach to their finances.

It is clear that the existence of negative gearing - compared to a situation where negative gearing did not exist - means lower rentals, but higher purchase prices.

Unlikely that this will change unless there is a real tax reform, ie one that could bring income tax rates down substantially, like what happened in the United States in 1986 (which substantially ended negative gearing in the US).
http://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986

pomtastic

Yep, it's such good value for money in Aus and cheap relative to income, people are dropping out of the housing market like flies. So your income multiples must be flawed somehow?

From today's Age:

http://www.theage.com.au/business/pr...0412-s47w.html