winter375

Hi, I was wondering, as a rule of thumb, what percentage of one's salary (pre-tax) is reasonably spent on housing in Sydney??? In other words, what amount of money should you bring home to afford a AUD 500 rent per week???

SarahandOli

er not sure of the %, but we have are in a 1 bed flat (very new, right by the train station - so paying a bit of a premium) for 375 per week - salary after tax and a very nice LAFTA allowance is over $5000.

Hope that helps!

Flutterscutter

Hi

Can i ask what LAFTA is?

SarahandOli

It's a living away from home allowance (oops that must mean it's LAFHA)! If you are here as a non permamant resident ie on a Visa 457 then you get some HUGE tax benefits.

Flutterscutter

OK thanks

not relevant to us.

winter375

any other feedback??

Megalania

My rules are to never pay more than 10% of gross income for housing, be that rent or house depreciation, never to pay a mortgage and don't count my house as part of my wealth. Pay more and it eats both current and, more particularly, future wealth.

Mummy

If my sums are right, we spend 5% of salary on rent in Sydney.

Gjn200

!!!!!! Lend us some cash can ya, you must be loaded!

Mummy

No, we just don't spend much on rent - only in a 2 bed flat, and not in fancy area. And I believe that the question was salary before tax. 30% of salary if after tax.

Geordie George

Currently, Mr GG and I pay 14% of our combined salaries on rent (just for the sake of clarity, I've excluded super from these calculations and just used base, but including super just reduces that to 13%).

So, by my calculations you'd need to bring home $15,471 per month (before tax) in order to achieve rental costs of $2166 per month (or $500 pw). That's $185,652 per annum - excluding super.

:scared:

Though, we live very close to the city (Sydney). But it is only a one bedroom place.

GG

RichS

If you're earning upwards of 20,000 per month then I'd expect rent would be the least of your worries.

I have a 3 bed detached house. It takes up 20-25% of our earnings.

Flutterscutter

I'm a bit confused with this statement.

If I go by your calculations it means that a person earning $100,000 pa receives $1923 pw week gross income, yet 10% of this would be a measely $192.30 pw to spend on rent or mortgage!!
Have i got things mixed up a bit, or are you saying thats what you should be spending on renting or mortgage? We'd have to be living in a lock up garage for that price in Sydney (if you were lucky!)

ABCDiamond

I know 2 people who rent in the Sydney area (about 40km west of the CBD), and they pay $250pw on $50k salary for a 3 bed house (26%), but with both working it becomes 14% of combined income.

and the other $160pw on a $35k salary (I think) for a 2 bed place (24%)

Flutterscutter

In other words, its not really feaseable even earning $100,000pa, unless you have a whacking huge deposit on a mortgage. As for renting you, can forget it really.
I would say 15 - 20% is far more realistic.