The National Housing Conference was held in Sydney on Thursday and Friday 21 and 22 February leading to major media coverage on housing stress in Australia. Housing stress is defined as rent or mortgage payments exceeding 30% of gross income.
According to a report (research paper 11) released by the Australian Housing and Urban Research Institute, high house prices means that the number of Australians renting will increase from 1.8 million in 2006 to 3.3 million by 1045. During this period the number of Australians suffering rental stress is projected to increase by 77%.
Since the conference, the problem of affordable housing has become a national crisis.
I can understand the problem.
In the December quarter 1998, the median weekly rent for a three bedroom house in the Sydney statistical division was $240. On the basis that rents are 30% of gross income, you needed a family income of $800 per week to rent that house.
In the December quarter 2007, the equivalent median rent had risen to $350. Now you need family income of $1,166 per week to rent the same dwelling.
Rents vary greatly across Sydney. In much of Sydney you in fact need to pay a minimum of $500 per week, often a fair bit more, to rent a three bedroom house. On $500, you need a weekly income of $1,700 to avoid rental stress.
If you want to own your own home or, alternatively, avoid rental stress, you do have a choice. You can try the regional alternative.
Rents are not always lower in Regional Australia. There are pressure areas such as mining growth points where rents are higher than the metro equivalents. But in most cases both house prices and rents will be lower, often much lower, so you do not need the same income just to survive.
It really comes back to what you want from life.
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