High levels of immigration and Greenie-inspired land-use restrictions can principally be blamed for that. The immigrants have got to live somewhere but State and local government regulations severely ration the locations on which new houses can be built. So inadequate supply causes prices to shoot up, as it always does. Greenies and “asylum seeker” advocates have hit the pockets of Australians hard.
As Miranda Devine says:
“To fulfil Kevin Rudd’s “big Australia” promise of 60 per cent population growth by 2050, Sydney will bear the brunt of the expansion, almost doubling in size to 7 million people. We must “embrace” this inevitability, a forum of planners, bureaucrats and business types agreed this week. Since all those new people have to live somewhere and the state government won’t release more land in greenfields areas, prepare yourself for more backyard infills and congestion, according to the Committee for Sydney forum at the Park Hyatt. And yesterday, Infrastructure Australia confirmed as much, with a report showing Sydney is the most congested city in the country. Those of us who live here don’t need a report to tell us Sydney’s once envied livability status is heading downhill, with worldwide indexes recording the slippage. Even Melbourne beats us now”.
AUSTRALIANS have to work almost three times harder to pay off the average family home than they did 50 years ago. Figures compiled by CommSec for The Sunday Telegraph reveal homebuyers on the average income now have to work for 19,374 hours to buy the average Australian house with the average mortgage.
Based on an eight-hour day and a five-day working week, that equates to about 10 years of work. In reality, it takes much longer to own a home, because wages must pay for all living expenses, not just housing. In 1960, it took homebuyers just 7500 hours to pay off the average mortgage.
CommSec chief economist Craig James said that half a century ago, average wage-earners took home the equivalent of $1.08 an hour. They needed to work 25 hours to meet the monthly mortgage repayment of $25, based on an average five per cent interest rate and a mortgage of $4620. Today, the average worker earning $30.04 an hour spends 70.7 hours – or almost two weeks of the month – at work to cover the monthly mortgage repayment for an average $283,000 loan at a 6.64 per cent interest rate.
The figures show rising costs and growing property prices have largely outstripped wages and young couples today need to work longer and harder to achieve the great Australian dream of owning their homes. Whereas homes were once affordable on a single wage, families now realistically need two incomes to fund a mortgage. “This is your single biggest purchase,” Mr James said. “This is where people are living. “We’re building bigger and better homes, so it was always likely we were going to be paying more in terms of the mortgage – and we’re certainly working longer to pay for that. “We’re working longer, but we’re probably working more flexibly and in jobs that we like.”
Mr James said that in Australia, unlike other countries, there was a lot of pressure to buy rather than rent and homeowners often saw their mortgages as a method of saving. “Records from the Commonwealth Bank suggest more than 70 per cent of people are paying more than they need to in terms of their home loans, so they’re ahead of their loans. “People see the home as a way of saving; they see it as an outlet for their finances. In other parts of the world, that’s not the case, but Australia has always had an affinity with the home.
“In the 1960s, it was a simpler life. Now more money is spent on housing, computers, the internet, mobile phones, whereas before it was food, clothing, transport. “We do have more opportunities now, but whether we’re happier remains to be seen.”
Sydney University anthropologist and author Stephen Juan said it now took two incomes and 30 years to pay off the average home. Half a century ago, it was one income and 15 years. Mortgages costing the average household 29 per cent of its income put huge strains on the family unit, Dr Juan said. “With that kind of inflation for the biggest item a middle-class family buys in their lifetime, which is the family home, when you have that kind of colossal increase that has been greater than the percentage increase in salaries – that’s the reason we have the crunch. “There’s so much pressure on us. We’re losing our leisure time, we’re losing our time for families, we’re having to commute further and further to get to work, we’re finding it more and more difficult to pay our mortgages. “Economically, we’re being really stressed, and there’s not enough time to do everything we have to do.”
Dr Juan said that 50 years ago, promises of technology brought predictions of an easier life and more time available for family and healthier lifestyles. “It was said we would have more time and be a leisure class because the machines would do the work,” he said. “What has happened, however, is that you have to pay for these materials and for this technology. “We’ve got better technology and better leisure-time activities available, but we don’t have the leisure time. It’s a catch-22.”