Someone should do this study in Syd/Mel: "Just 43 homes on the market affordable for first-time buyers in London" http://t.co/Z6mxFsOwcMMark Colvin of the ABC and host of the single best Current Affairs program across all media in Australia, "PM", posed the question to Twitter.
— Mark Colvin (@Colvinius) April 29, 2015
To reiterate what that problem was, The Grauniad¹ newspaper in Britain quoted a study by the charity Shelter, stating that:
There are only 43 potentially suitable homes in London currently available that would be “affordable” for the typical young family buying their first property, according to research by Shelter.
- The Guardian, 29th Apr 2015²
Shelter's criteria to find something affordable, started with the assumptions that "they had saved a 17% deposit and could get a mortgage of 3.4 times their income" and that "Looking at listings of properties with two or more bedrooms on the website Zoopla, the housing charity found that just 0.1% of those in the capital would fall into what they defined as an “affordability threshold”.
So then, those are the assumptions.
- 3.4 times income
- two or more bedrooms
I must admit, I have no idea what the yearly income is for the average young family; nor do I have an idea of how Shelter would have compiled such a figure but I do know that the Australian Bureau of Statistics and the Australian Taxation Office publish a figure called Average Weekly Ordinary Time Earnings every six months (it used to be three).
As at December 2014, AWOTE was $1,476.30³
If you multiply that by two (assuming both partners are on AWOTE), then you get $2,952.60 a week.
If you multiply that by 52.178 (being 52.178 weeks in the year) then you get $154,060 a year.
If you multiply that by 3.4 times the income, then you arrive at $523,804.
When you consider that the average house price in Sydney is $671,500, things look a little grim but lo and behold, if you do a search in Domain.com.au⁴, there are 2093 properties for sale found in Sydney Region with two or more bedrooms.
However, the conditions of a single income paying off a mortgage as was the case a generation ago, have for all intents and purposes dried up entirely.
For a single income family where one partner is on AWOTE, then at just $77,030 a year, if you multiply that by 3.4 times the income, then you arrive at $261,902.
Believe it or not, there are in fact a whole 15 properties for sale with at least two bedrooms; with the closest to the CBD being two properties in Stanhope Gardens.
Of the 12,788 properties listed for sale on Domain across the Sydney Region, 16% potentially meet the criteria assuming that both partners are on AWOTE but for a single income family on AWOTE, that falls roughly to that same figure in London at just 0.1%.
There's a problem though, although the official Average Weekly Ordinary Time Earnings is $77,030 a year, around 70% of all tax payers earn less than this. If you decide to include pensioners in the mix, then about 80% earn less than AWOTE.
Neither the ABS or the ATO publish the other measures of central tendency like the mode wage (the most common) or the median (the one in the middle) because I suspect that they fear that the results will prove what most of us suspect, that the statistics are massively skewed by a tiny number of very high income earners.
¹Yes I know it's the Guardian. Even the Guardian knows that it has a reputation for typographical errors and even registered grauniad.co.uk to redirect to its website.