SmartyPig

With average house prices in Australia rising by an unbelievable 11.3 per cent in 2009, and expected to rise again by 4 – 6 per cent in 2010, it’s not looking good for first home buyers.  That piece of the Great Australian Dream always seems just out of reach.  The more money we save for a deposit, the more expensive houses become which means we need more money for a deposit. And so it goes.  So the question is have we become a nation of two halves, the “have houses” and the “have-no-houses”?

While you’re weighing up the pros and cons, here’s a thought to ponder which may provide some explanation.  In a recent ranking of international housing markets, Australia scored the worst housing affordability in the world by taking out six of the top ten spots.   For the statistically minded, the ratings were calculated by dividing median house prices by annual median household income.  But before you crack open the bubbly in celebration of topping yet another list, you should know that our Canadian pals actually beat us to the punch and the number one spot.  Yes, if you really want to know what it’s like to live in a city where you can’t afford to live, then head to Vancouver.  Not a bad time to go, mind you, but be warned, accommodation may be at a premium at the moment. But perhaps if you wait until the post-Winter Olympic euphoria has vanished into the thin mountain air, there might be a bargain or two on offer.  Or not.   You could always look for property a little closer to home, but just be selective about your preferred location.  According to the list, if you want to actually live within your means, you probably should try and avoid Sydney (where you’ll be spending around 57 per cent of your income on the mortgage), the Sunshine Coast, Darwin, the Gold Coast, Melbourne and Wollongong too – they’ve all proudly ranked right up there in the top ten.   Lucky for us, it is a big country, but if you’re really looking for that place to call home that you can really afford, best pack the bags and head east, way east, to the city of ten-gallon hats, cowboy boots, George W and black gold.  Ah Dallas, Texas: beautiful one day and apparently, affordable the next.

So next time you rejoice at the news that housing prices have risen again or more to the point, that your interest rates haven’t, spare a thought for those of us out there trying desperately to join the party.  If only we could afford it.

Until next time

Team SmartyPig