[Max Carnage]

The obfuscation over house/home price to income ratios can now STOP! The ABS has released personal income data by LGA and SLA nation-wide. The data contain both wage income, other sources, and combined. That means we can produce accurate statistics for:

house price to average wage
home/unit price to average wage
house price to average income
home/unit price to average income

We can produce these ratios for anywhere that accurate data are available for home and house prices, which includes NSW, VIC and (houses only) SA.

Anybody up to the challenge? I'll start with my SLA (figures are from 2008, not adjusted, but little - ~2% price decline - has happened since):

house price to average wage = 7.3x
unit price to average wage = 7.1x
house price to average income = 7.2x
unit price to average income = 7.0x

NSW folk can get local home/unit/house prices from your Office of Housing: http://www.housing.n...ts/Overview.htm

VIC folk can purchase their price data from housing.vic.gov.au or PM me their LGA/SLA.

SA folk: http://wic003lc.serv...ge=statistics-2

Quote

6524.0.55.002 - Estimates of Personal Income for Small Areas, Time Series, 2003-04 to 2007-08
LATEST ISSUE Released at 11:30 AM (CANBERRA TIME) 14/09/2010

INTRODUCTION

This article presents selected data on estimates of personal income for the years 2003-04 to 2007-08, at a range of geographic levels. From 2003-04 to 2007-08 personal income in Australia grew at an average annual rate of 8.7%.

Analysing change in sources of personal income over time can provide valuable insight into the nature of regional economies and aspects of the economic well-being of the people who live there. This article begins with an overview of the sources of personal income for Australia, highlighting variations in average annual growth rates between 2003-04 and 2007-08 by source of income. It then analyses regional variations in average income from all sources at the State/Territory and Statistical Division level for 2007-08. The final section of the article examines variations in the 'income mix' between regions (i.e. the proportion each income source contributes to total income) using a number of Statistical Local Areas in Victoria as case studies.

http://abs.gov.au/AU...08?OpenDocument

Edit: Actually the ABS have another comparable dataset that extends back to 2001/02:
http://abs.gov.au/AU...06?OpenDocument

[RumpledElf]

I think it was The Punch I saw a comment on this yesterday, and was surprised that the highest earning small area was only $110,000. From the way some people talk you'd think the entire of Sydney is on that average, not just the top suburb.

My father in law lives in the highest earning suburb in Adelaide - no wonder the MIL (they're long divorced) makes snide remarks about him

[Solomon]

RumpledElf, on 15 September 2010 - 01:17 AM, said:

I think it was The Punch I saw a comment on this yesterday, and was surprised that the highest earning small area was only $110,000. From the way some people talk you'd think the entire of Sydney is on that average, not just the top suburb.

Exactly RE.
And as Max says, we should be able to now receive a better comparison between price to income ratios.
What you say is the manipulated impression we receive from those Auction shows on TV, that everyday people are buying the higher price homes. Do they ever show the lowest price auctions???
Not likely.
Wouldn't want to give the impression that some people can't afford the $800,000 shanty.

I look forward to what Max and others might reveal from the statistics, because we may actually be way above the 7x and 8x average wage in certain places with house prices.

If that presentation by CBA revealed that some places are 9.1x, I'm of the opinion that others may be above 10x.
Wait till that hits the public press.
Wake up Australia!!!

[hamish]

My initial look gives me the impression that the majority of incomes aren't nearly as high as reports like the CBA would suggest. There are a lot of part time workers out there, and even most with a full time job aren't doing amazingly well.

[ummester]

hamish, on 15 September 2010 - 03:30 AM, said:

My initial look gives me the impression that the majority of incomes aren't nearly as high as reports like the CBA would suggest. There are a lot of part time workers out there, and even most with a full time job aren't doing amazingly well.

Like we haven't known that for years. Average full time wages may or may not be 65k Oz wide but averge yearly incomes are much, much less.

It wouldn't surprise me in the least of most families are bringing in less than 80k PA - with 500k houses, that doesn't make a lot of sense. Gotta love those credit cards.

[Bernard L. Madoff]

ummester, on 15 September 2010 - 04:03 AM, said:

Like we haven't known that for years. Average full time wages may or may not be 65k Oz wide but averge yearly incomes are much, much less.

It wouldn't surprise me in the least of most families are bringing in less than 80k PA - with 500k houses, that doesn't make a lot of sense. Gotta love those credit cards.

From the home of that other great resource exporting property bubble (tho only in certain cities not countrywide ala Oz)...
http://globaleconomi...ycheque-to.html

[tor]

ummester, on 15 September 2010 - 04:03 AM, said:

Like we haven't known that for years. Average full time wages may or may not be 65k Oz wide but averge yearly incomes are much, much less.

It wouldn't surprise me in the least of most families are bringing in less than 80k PA - with 500k houses, that doesn't make a lot of sense. Gotta love those credit cards.

When that 500K house is going up in value more than your after tax salary why ask for a raise, work overtime or skimp on holidays?

[Charles Bukowski]

My area has an average wage of $42332 , current median house price is $449,000 for my area. is that 10.6x ?

This occurs when the people buying the homes don't actually live in them

[B9force]

It's probably the case that, in any given Australian suburb, most people currently living in that suburb would not be able to afford to buy a house there at today's prices.

Which would just go to show how ridiculous things have become.

[ummester]

tor, on 15 September 2010 - 04:18 AM, said:

When that 500K house is going up in value more than your after tax salary why ask for a raise, work overtime or skimp on holidays?

Yea, put it all on the mortgage. Let balancing the books later be the kids problem. She'll be right maaate:)

[itching]

Around here avg wage ----
$38, 720

Average house prices in the 4 suburbs with that postcode ----
$387,000
$560,000
$415,000 &
$383,500

[theintelligent1]

Mine is Cottesloe WA

Avg Total Income (ABS): $98,219
REIWA Median House Price: $1.9Mill 2010 (2008 was $2.05mill)

Lets be nice and call it 19x..........

hmmm...my choice is to rent there overlooking rottnest at less than 1.7% yield.......

[tor]

Mine is Hornsby NSW (not sure if I am in the North or the South, doesn't make a world of difference).

Avg Total Income: $52 or 54K
Median All Dwellings: 457
Strata: 428
Non Strata: 665

Ouch for the non strata. 12 times. Holy crap they are saying that is up 17% over the past year. Nasty.
[/quote]

[Max Carnage]

theintelligent1, on 15 September 2010 - 05:39 AM, said:

Lets be nice and call it 19x..........

I think we have a winner?

Do know what the median home price is (including units), theintelligent1?

[Max Carnage]

B9force, on 15 September 2010 - 04:48 AM, said:

It's probably the case that, in any given Australian suburb, most people currently living in that suburb would not be able to afford to buy a house there at today's prices.

Which would just go to show how ridiculous things have become.

I think you're right, and I think it proves the bubble. I'm not sure how anybody could think otherwise but apparently they do.

Now if we can just turn that 'probably' and 'think' into evidence...

[mamabear]

Canada Bay
All ~12 x (Average total inc compared to median and mean sales)
Non-strata ~ 16x (median), 18x (mean)
Strata ~ 10x

Randwick
All ~ 13x (median), 15x (mean)
Non-strata ~ 18x (median), 24x (mean)
Strata ~ 11x

[tux]

19x, 13x, 10x . . .

The bananas in Australia don't only grow on plants.

[Ruffian]

I'm also astounded to find it's close to 10x in my neck of the woods, a nice but not stunning eastern suburb of Adelaide.

WTF happened to this country?

[Bernard L. Madoff]

Ruffian, on 15 September 2010 - 10:25 AM, said:

WTF happened to this country?

Many folk living pay to pay. I don't, f*ck 'em all (this this get me a Somersoft award?).

http://globaleconomi...ycheque-to.html

[Solomon]

Wow and Wow again.
Those are scary figures.
Thank-you to all those who took the time to work out their ratio.
Very helpful and extremely enlightening.
Proves and vindicates so many on this site and the previous GHPC.

And I can't prove it, but I think people are beginning to finally awake from their slumber, and face the reality of what the banks hoodwinked them into thinking was the reality. The Matrix is alive and well in Australia.

That's what happened to this country, Ruffian.
And to the whole world.