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a question about housing in Sydney « Previous | |Next »
February 20, 2006

The Sydney property market has now become so expensive that most young couples will never be able to pay off their mortgage within their lifetime. So The Daily Telegraph reported on Saturday. It went on to say that “the cost of buying a home in Sydney is now $518,000, far outstripping other cities and that the average annual salary in Sydney is $61,000." And Reserve Bank governor Ian Macfarlane stated that household indebtedness has grown at a rate well in excess of the growth in household incomes.

How can someone on $61,000 get a mortgage to buy a $518,000 house? It just ain't possible. The banks only lend around 4 times annual salary, not 8 times.That means many people cannot afford to buy a house in Sydney. It is quite probable that many in Sydney who do own have mortgages greater than the values of their homes.

What is going to happen? People will vote with their feet and leave Sydney? Probably. Sydney is growing slower than Brisbane or Melbourne, companies are not moving there, and the people are not coming. The allure of the global city is fading for ordinary Australians

| Posted by Gary Sauer-Thompson at 8:55 PM | | Comments (0)