Housing bubbles, rents and affordability in Sydney and Melbourne: A demographer’s take

Glenn - The Census Expert

Glenn is our resident Census expert. After ten years working at the ABS, Glenn's deep knowledge of the Census has been a crucial input in the development of our community profiles. These tools help everyday people uncover the rich and important stories about our communities that are often hidden deep in the Census data. Glenn is also our most prolific blogger - if you're reading this, you've just finished reading one of his blogs. Take a quick look at the front page of our blog and you'll no doubt find more of Glenn's latest work. As a client manager, Glenn travels the country giving sought-after briefings to councils and communities (these are also great opportunities for Glenn to tend to his rankings in Geolocation games such as Munzee and Geocaching).

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7 Responses

  1. Kevin Kean says:

    Thank you.
    This has got to be the most balanced and erudite explanation of the situation I’ve seen from any pundit in the market today.

  2. Thanks Kevin – it’s so easy to get carried away with the hype!

  3. Michael says:

    Thanks Glenn. ID Atlas also provides a snapshop of Mortgage Stress (and Rental Stress) which I think is a useful indicator in this debate. I have also seen median household income as a proportion of median house purchase price used as an indicator of unaffordability. For example, the median house-price 20 years ago were around 3 times median household income in most Australian capital cities which has increased to between 6 to 9 times household income in 2011.
    The percentage of households renting has also been steadily increasing (now over 30% of all household in Sydney rent in 2011) which I think reflects more a lack of affordable housing than rental as a choice.

    • Yes income measures can work, but make sure it’s household income – as we have had increasing proportions of dual income households pushing up prices for decades now. But where people are already in the housing market this isn’t a great measure either, due to equity. Some of the most expensive areas have relatively low home loan payments because people have bought in largely with equity from previous ownership.

      And more people are renting, certainly (up by 1.5% Australia-wide 2006-2011 as a share of all tenures but only 0.7% in Sydney), http://profile.id.com.au/australia/tenure?WebID=250&EndYear=2006

      High migration can also affect this though – migrants are more likely to rent when they first arrive than buy.

  4. Kim Houghton says:

    Great piece Glenn, thanks very much! And Ivan too – I’m getting sick of hearing from the Brawlers and Bawlers . There was a long piece in the Canberra Times on Saturday by a reasonably sensible economic columnist Ross Peake which ended up all being about supply! I can’t believe how gullible so many people are to the housing industry mantra that it is all about supply. As Glenn says – ‘It’s all about location’. And I’d add about capacity to pay too – which is why the not-so-subtleties about building equity and trading up and household rather than individual incomes are so important (and so rarely discussed).

  5. Nick C says:

    Insightful analysis Glenn, a refreshing change from the shallow sound bites on the issue promulgated by most of the media.

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