Wednesday, November 13, 2013

Australian life - that's Sydney


I have a love-hate affair with Sydney.

I love the city's variety and beauty, but dislike its pretensions. It is a wonderful place to visit and just spend time wandering through, but increasingly its becoming hard to live there.

I haven't checked the latest statistics, but the median Australian income is about $50,000. That is, half earn less than this, half more.

In Sydney, the median house price has reached $722,00, close on fifteen times the median income. In Sydney, rental vacancies have again dropped below two per cent, The median rent for all dwellings in greater Sydney has reached $470 per week. In the inner ring, the suburbs immediately surrounding the central city, the median rent for a two bedroom house or apartment is $600 per week. That's quite a lot of money, more than a person on the median income can afford.

These price effects are creating some quite interesting and indeed profound social changes. The Sydney papers such as the Sydney Morning Herald have been featuring a series of stories on what we might call inter-generational conflicts. The house owning old want to realise or manage their assets to support their retirement. The non house owning young want to access those assets to help them into housing.

You can see why conflict might result. Young Sydneysiders even in the professional class struggle to save the basic deposit to buy a place without parental top-up.

Once you do have your first place, life becomes easier so long as you haven't over-borrowed too much. Your own savings plus capital gains allow you to think of a bigger place. You don't have to worry about moving, a constant issue with those renting. Now you can happily join the Sydney real estate game!   

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