How to measure housing affordability

By Leith van Onselen

LF Economics, a new Australian analytical and research firm, has produced an interesting report examining housing affordability in Australia, which it finds is in a dismal state.

The report includes a bunch of interesting charts benchmarking Australian housing costs against our international peers. Below is a sample of the report’s key findings.

1) Saving for a deposit:

ScreenHunter_6953 Apr. 10 08.13

Based on median multiples, Sydney-siders will spend the better part of 6.54 years to save for a deposit on a median priced home. Of all the cities in the sample, only residents of Vancouver spend more time saving for a deposit on a home than in Sydney. Homebuyers in Melbourne, Adelaide, Perth and Brisbane will spend 5.78, 4.30, 4.09 and 3.97 years respectively to save for a 20% deposit. This stands in stark contrast to the time it takes the majority of Americans living in major cities to save for a deposit. Residents of Tampa, Houston, Atlanta and Phoenix spend 2.07, 2.32, 2.47 and 2.53 years respectively saving. Los Angeles, the second largest city in the US ranked 6th in the sample.

2. Time to pay off principal:

ScreenHunter_6954 Apr. 10 08.15

If 30% of today’s household income was allocated to paying just the principal on a home loan and it takes more than 15 years, we believe this represents ‘significant homebuyer mortgage stress’ and ‘severe mortgage affordability constraints’…

For residents of Sydney and Melbourne, it would take 26.15 and 23.12 years respectively to pay just the principal of an 80% LVR loan using 30% of today’s household income. In Tampa and Houston, it would take just 8.26 and 9.23 years respectively.

3. Years to own home outright before interest (30% of income):

ScreenHunter_6955 Apr. 10 08.17

… using 30% of income to pay down principal before interest… it would be mathematically impossible, as per the calculated formula, for residents of Vancouver, Sydney, Melbourne, London, Auckland and Los Angeles to own their home outright within a span of less than a quarter of a century.

4. Principal payments as a proportion of income:

ScreenHunter_6956 Apr. 10 08.19

New homebuyers in Vancouver and Sydney are spending a hefty proportion of their incomes to pay down debt obligations even before interest is factored in.

The report has much more, including comparisons of the cost of servicing mortgages in different locations at various interest rates (i.e. 3%, 5% and 7%). Under all scenarios, housing affordability in Sydney and Melbourne, in particular, sucks.

What I like most about this analysis is that it focuses primarily on the costs of paying-off a home’s principal, and excludes mortgage rates. This nullifies the whole “but interest rates are at record lows” argument, even though Australian mortgage rates are typically higher than elsewhere.

Even excluding the impact of mortgage rates, on all measures Australian housing affordability is dismal – whether measured in absolute terms or relative to the rest of the world (Vancouver being the only exception).

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Comments

  1. You are doing it wrong, you are not meant to pay off the principal, interest only all the way for 5 years, refinance to new lender, interest only, dip into equity to buy second property, interest only, interest only….

    Only mugs pay off the principal.

    • Indeed.

      And with every 0.25 % rate cut that’s a substantial cut in repayments and greater ability to leverage.

      That’s the SMART way we make money in Straya with the help of our friends at the central bank.

      • So really and truly, there is no home ownership at all….just a bond with the bank saying that you cannot be thrown out by your banker landlord at their whim as long as you keep paying the interest, which is really rent.

        Then, because prices are at the huge bubble stage, the banker landlord, conspiring with the central banker will be able to take over the property and toss you out when the cash rate is increased to 7% with mortgage rate at 10%.

  2. Sure, I could move to Adelaide or Brisbane and my PPOR would be significantly cheaper. But, I want to live in Sydney. I have been to London and Manchester and you simply cannot get a PPOR of the type I have (800m2 land next to a huge park, double story, 2.5 garage, large pool, grassed yard – 15 minutes to Parramatta for work, 10 minutes to Castle Hill shopping) for what my place costs. Sure I could get a terrace or some such dwelling in London or Manchester, but I don’t want it and I certainly don’t want to live in that country. Pretty sure I don’t want to live in a big city in USA either. Sydney is paradise compared to those places.

    • I’ve travelled a fair bit. America has some nice cities and touristy towns.

      But seriously the rest of it is a shit hole with scummy people earning $10 per hour as adults not far away, with cops killing people for no apparent reason.

      I’d pay a premium to live in Australia. Probably not double the next best…. but I’d pay more.

      • Kinda like sydney, some postcard picturesque areas for sure, beautiful beaches, but venture a little out west and it looks like hell.

      • I’d suggest you maybe haven’t travelled that much in the US then. Granted there are some crappy places but there are a LOT of good ones.

      • I’d pay a premium to live in Australia. Probably not double the next best…. but I’d pay more.
        You’ll pay a premium until our cities are no better than others. That’s where we’re heading as we migrate to high density living because we can’t create quality jobs, invest in public infrastructure ….. etc

      • AlexD

        Yes. Are you saying you would not pay a premium for something you want or desire?

        Are you happy to go without just so you can (in your mind), take the higher ground.

        I suppose it’s also not worth achieving something in fear others might compete and catch you. May as well stay where you are and stay as you are.

        Not for me.

      • I lived in America for 2 years.
        I purposely visited and shopped in high-crime areas every now and then to compare it to where I was allocated to live. Its not that much different than here… except that in America guns are so muc more common. Tooting someone at a traffic lights may lead to you getting shot at or atleast get a gun pointed at you…. it happens in the good areas too, all races too.
        In Oz, you may get a finger stuck up at you or maybe someone try to ram you with their car on a bad day, but you can be confident that chances of getting shot at is remote.

        The one thing Australia has over USA is our health care…. going to the Doctors, you only worry about the diagnosis…. in USA you worry about whether you get looked at to begin with or if you could afford the treatment/post-checkup cost.

        The day Australia change their healthcare, is the day I move back to America or some other country that is cheaper to live in… atleast that way I can save up for health related costs, as opposed to 50%-90% of my monthly salary going to the house repayments.

      • @Escobar
        Yes. Are you saying you would not pay a premium for something you want or desire?
        Not what I said at all. I essentially said I/others would until the reasons for paying the premium no longer exist.

        Are you happy to go without just so you can (in your mind), take the higher ground.
        I have gone without before but, this isn’t about the high ground. The point I am making is that there are foreseeable consequences from the choices being made.

      • AlexD

        Sorry. Thought you were saying…. pay your premium and then get destroyed by what’s to come.

        I took it the wrong way.

        But I’d definitely not pay a massive premium. Which is what is being asked for right now in some markets.

      • I’d definitely not pay a massive premium. Which is what is being asked for right now in some markets.
        Indeed.

    • That’s nice, Tian
      If you don’t want to live in England why do you bring it up?
      I think there might be more to this than meets the eye.
      Methinks perhaps you protest too much?

      • I mentioned London and Manchester because those cities are on the charts in the article I was commenting on. I would pay extra to live in Sydney than both those UK cities because I think living in Sydney provides a far better quality of life.

      • Tian, I would agree with you. Many others would too. But many Londoners and Mancunians would not, they enjoy where they live.

        Thats all kind of pointless isnt it? Its not what you or anyone else WOULD pay, its what they HAVE to pay in order to live their lives.

    • This is where these things fall down of course. You and a chap below put the pro-Aus arguments, but you got to remember that all countries are different.

      For example, I lived in Connecticut for several yrs and for US$500k you can get a great 4 bedder on ¼ acre in one of the richest counties in the US. You are 10 mins from a major financial centre, 40mins from Manhanttan and surrounded by beautiful countryside. Can I do that in Sydney?

      Or if I want to be in Greater London, I can live in Surrey or somewhere equivalent in another direction and have a nice suburban lifestyle within commuting distance, granted not for US500k. But then again London is a world financial centre.

      • Quite right, Dave.

        Sydney is a v nice place, but has a massive housing bubble and is not a global city by any stretch.

        In fact, in terms of its Financial Services economy relative to the rest of Asia; it has been falling down the pecking order for some years now.

        And this is not just because the customer’s best interests is anathema to the industry and the government. But it doesn’t help.

      • Dave

        I’ve been to connecticut. Have cousins there. Harford.

        People are wealthy there, that’s for sure.

        There are always exceptions to my general thoughts about countries.

        But fat people in Walmart with hand guns in purses beat our fat people in Kmart.

        America is its own parody.

      • @Excobar, yes the extremes are more extreme. 15x the size would have to be. But if you live in the nicer places you rarely come across that stuff. Not for everyone, but just as TIan above – almost all Americans think they live in the best place in the world and everyone wants to come and live there. Even the fat ones with guns in Walmart. Its a common human conceit.

      • Dave

        I hear you on the conceit thingy.

        But growing up I would often lament and question my dad why we didn’t live in America with the other half of the extended family.

        But now I’m happy to feel safe to see “Get Hard” in the movie theatre knowing I have a very very high chance I won’t be gunned down.

        Having said that. I fully enjoy American films, music and technology.

        My complaint isn’t about the people. It’s about a society with little middle class.

        Which is what our youth may experience.

        Sorry for being so blunt. But unless I was very wealthy, I wouldn’t want to live in America.

        I’m not a food stamp kinda guy.

      • In America its a bit different though in regards to buying and rent, well where I lived anyways.
        A colleague I worked with over there lived in Ann Arbor Michigan (70 miles from Detroit) and he was paying 3K a month on rent… Ann Arbor is a professional/Student town after all, doctors, engineers, scientists etc live over there. House prices is around 500-600K for a *newish house on a big lot. Old houses are around 250K-300K…. the 3K rent includes repairmen, gardeners maintaining your home though… he lived in a private community.

        Also whilst there, I have to mention that my weekly groceries never exceeded 25 bucks USD and I bought similar things I buy here… today, I spend upto 60-70 AUD on my weekly requirements.

        Also for 350K USD, you can buy a 4 bedroom newish house 10 minutes from the CBD, New York, LA, San Francisco excepted… since those areas are the glamour cities. But its also worth mentioning that americans pay low cost on consumables and houses due to supply/demand…. but a typical family spends thousands on medical costs a year, that and sporting tickets, its very common for a family to have season tickets for their home town sports teams that can cost upto 20K a year.

      • @Escobar “It’s about a society with little middle class.Which is what our youth may experience.
        Sorry for being so blunt. But unless I was very wealthy, I wouldn’t want to live in America.”

        Probably not be able to get to the detail of this argument here, but the US is VERY middle class. What it does have that Aus doesn’t is a big class of working poor, estimated at 30-40M. These folks don’t have a pot to piss in.

        But everyone else who is not elite is middle class i.e. lives in a nice 4/5 bed house (avg cost probably 200k) on a good piece of land (eg acre) has 2 cars, and plenty of disp income to spend on interests. That’s because the cost of living is hugely cheap. About the only exception to that is insurance which is bloody expensive, but as long as your employer picks the med ins up you are fine. Everyone gets a hugely distorted view of US thanks to media, but the reality is it’s a pretty humdrum, exurban picture for the most part.

      • @TheSauce “its very common for a family to have season tickets for their home town sports teams that can cost upto 20K a year.”

        WHAT??! not saying you’re wrong, but never came across that… sports tickets generally pretty cheap. Only season passes I heard of for NFL or maybe college football in Midwest. But never heard figures like that.

        Joining a golf (country) club OTOH definitely that number or higher in many places. Cheap golf one of the joys of Aus 🙂

      • wrt $20k sports tickets-

        I guess if you live in the US, and happen to not enjoy attending sports matches all that much, you can easily live like a millionaire

      • Dave,

        I think you’re arguing my point. There are too many poor and uneducated for my liking and too many exploited illegal aliens. Rich Americans have an unhealthy entitlement to use people as cheap labour.

        Secondly and elaborating on the top 10 or so percent…. they are actually quite smart. However my impression when travelling is that the rest are poorly educated and can’t think for themselves.

        It appears to me that if some haven’t been trained they’re unable to help you.

        This is a similar experience my Australian cousin encountered in afganistan. The Americans knew they’re stuff. But no more. A big generalisation, I know.

        They say I don’t know… or that’s not my responsibility.

        This is a big generalisation however in Australia if someone doesn’t know they’ll try to help and or tell you they’ll look into it and get back to you.

        I’m only talking about the bottom 50% or whatever dubious % I want to use to make this horrible point.

        I just notice a difference.

        Australia may be heading that way.

        But F’ me the amount of blank stares when asked a question is amazing in the states. Trust me they understood me. They thought I was from New England.

        Also, I felt sorry for the African Americans. In retail they were fantastic to deal with and I only hoped their personality and drive would see them move up the chain.

        Anyway. I see differences.

        And don’t want to live there, unless I was rich and had a job in one of those excellent tech or movie or music industries.

      • Sorry for being so blunt. But unless I was very wealthy, I wouldn’t want to live in America.

        What’s your benchmark for “very wealthy” ?

        Because if you’re making $100k+ in place like Phoenix or Houston, you’ll be living quite comfortably. Paying off a good sized house in under a decade, new car every few years, annual overseas holiday, eating out a few times a week, etc.

        While $100k is a top-decile income in the US, I don’t think anyone would classify it as “very wealthy”.

  3. What about the factor of “household income” for now (2 incomes, mandatory) vs earlier years (1.x incomes, by choice)?

    Skimming through looks good. What a disgraceful outcome the powers that be and the collective RE owning citizenship have created here and in Vancouver.

  4. IMHO the current situtation cant/wont change until Australian cities are somehow forced to become economically productive export centers that can positively leverage their own human capital. So long as our cities are allowed to remain unproductive national parasites they’ll convert all of Australia’s economic output into over priced over leveraged RE….it’s just what they do so well!

    • CB Wish there was an infinity sign i could put a plus in front of that statement.
      That statemernt ought be framed and kept in front of everyone.

    • Agreed.

      -1-way Free Trade Agreements (no restriction free trade agreements)
      -Negative gearing policies
      -Union-biased state governments
      -High immigration in-take WITH a compacting manufacturing/mining sector.

      Are just some issues that are contributing to the “non-productive” Australia we currently have.
      The Government’s vision of Australia simply becoming a “service” country to the Asian countries around it will see Australia become more of 3rd world nation down the line.

  5. Those people in London, Melbourne, Sydney and Vancouver should go out and earn more income, perhaps ?

    The mechanisms are there …. maybe they’re spending too much of all their time unproductively / not earning income …. on blogging, maybe …… is income-earning desire predominantly a life-choice?

    Just asking the questions.

    • Seriously, thats a pretty dumb point you’re making there. If they’re out earning in, someone else is not. Same result.

      • Seriously, pretty good point … same person working at same place, doing same job, earning more = no crowding out of another.

      • Unfortunately, you erroneously accept that income growth of one is at the expense of another. Does not work like that, mate.

      • Yep Funk – reference CB’s comment above on cities! However unfortunately the way we currently operate, with all its negativity and ingrained stupidity, Dave and Sauce are sort of right!!!!!

      • Somewhat facetious, but then your point was highly simplistic… but have you considered that if someone does create “new” income then its part of the process that attracts more people to that place driving up accommodation costs and driving down living standards.

      • @flawse,
        No, they’re not even ‘sort of right’ . See my below 2:18 pm reply post to The Sauce … it’s all about ‘income’, not wages. Sorry.

        PS: Note I printed ‘ …. should they not go out and earn more INCOME ‘ ….. (I never stated they should earn more ‘wages’)

      • @Dave
        My point goes to the profound issue of ” Is property too highly priced”, or “Are incomes too low”. We may tend to focus on the former.

        So, my point is a deeply significant one, therefore not to be dismissed as either ‘facetious’, or ‘simple’ … that is, in the income affordability issue, it may be that incomes are too low, not that prices are too high necessarily … so get those incomes up , rather than focussing only on getting the prices down!!!! .
        Trust my related contribution more valued now by yourgoodself.

      • Dave we are uncompetitive in every industry already. We do not need higher costs.

        Funk – I was agreeing with you actually. It’s just our economy and institutions are so moribund.

    • Naive statement me thinks.
      There are only a certain amount of money in the economy as wages, to make more money is to take away from someone else.

      • The Sauce
        The identity is ‘ household income’ , not ‘wages’ . Additional income ( eg. opening a new venture, trading income, etc, etc ) can be earned without subtracting from an existing another’s wage.

    • I presume you mean “city” rather than “country”. The 30 years at 30% refers to Sydney, not Australia. Stop deliberately misleading people. The chart clearly shows other capital cities in Australia are significantly less expensive than Sydney (e.g. Brisbane 19 years, Perth 21 years).

  6. using median home price is not very good way to compare house prices because price distribution is not the same in all places. Vancouver seems to be much more expensive than Sydney when median price is used but reality is much different because of much wider price distribution in Vancouver. In other words there are many more cheaper homes in Vancouver that allow FHBs to buy a decent home without need to save for 5 years for 20% deposit. For example, an average FHB family can buy nice 3bdr townhouse 13km from CBD for $315k,
    http://www.remax.ca/bc/burnaby-real-estate/na-2656-tretheway-dr-na-wp_id114169832-lst
    or for people with lower income there are quite a few nice, large 2bdr units under $150k 20km from CBD. http://www.remax.ca/bc/new-westminster-real-estate/na—211-466-e-eighth-av-na-wp_id109321610-lst
    That kind of money even when adjusted for exchange rate or income buys nothing anywhere close to Sydney or 40km around.
    even twice as much money, $300k cannot buy any 2bdr unit (not even a crappy one) anywhere within 50k from CBD (small 2bdr units in Mt Druitt start $300k)
    http://www.realestate.com.au/property-unit-nsw-mount+druitt-119268683

    So although Sydney may seem to be cheaper when median figures are used, it’s actually much more expensive for FHB and low income families than Vancouver.

    EDIT: I’m not saying Vancouver is cheap, it’s actually very expensive but still cheap and affordable compared to Sydney> people living on minimum wage is Sydney cannot afford anything, not even a parking spot 50km from CBD

    • Yeap. Thanks to our obsession, the floor on prices is on what we can borrow and not what we can afford.

    • Agree with this. Any “starter” or fixeruperer home is bought for top dollar by leverage happy the block wannabes leaving nothing for starters.

    • I thought Median meant the middle value in a list of say house prices. Therefore 50% of the houses would be cheaper than the median and 50% greater than the median. You will always find houses different to the median price.

      • Shawn, I interpret what drX is saying, as the spread of those lower prices below that middle value is much greater in Vancouver than in Sydney. It’s the ‘higher floor’ flyingfox refers to.

      • Yes, but in Sydney you will not find very many homes for much less than the median (half tan median). In other cities median maybe high but there are homes that are significantly cheaper (third or less) so that even people with income significantly below median can afford to buy.
        Using median just tells weather homes are affordable for someone earning median income. It says nothing about affordability for people who earn much less than the median (half, one third or even less).

        There are thousands of 3+bdr houses priced under $200k just 20km from Manhattan (not counting homes in areas with high crime) so many lower income earners can afford to buy a house. On the other hand there are no suburbs (not even ones with high crime rate) anywhere within 50km from Sydney CBD where 3bdr house costs one half or third of the median price

      • @DocX

        Indeed. The distribution in Australia from my observations is heavily positively skewed. This also provides strong evidence of a demand/speculation dynamic than a shortage scenario.

      • @Doc
        On the other hand there are no suburbs (not even ones with high crime rate) anywhere within 50km from Sydney CBD where 3bdr house costs one half or third of the median price
        interesting point but inst this just the direct result of Sydney having a much better social net than New York state. seriously most suburban rental accommodation targets the bottom quartile, so rents and RE prices (for this segment) reflect the ability/inability of these people to pay more. Australia is different because we socialize this disadvantage and then use rents and RE prices take back what we “give”. As Maggie used to say: The problem with socialism is that eventually you run out of other peoples money” I guess she never considered the recycling of welfare that plays such an important role in supporting Sydney’s overpriced RE.

      • I was not referring to poor people living on welfare – they are not in position to buy anything in any of these places (other countries and cities have public housing and other welfare systems as well – 200k public housing dwelling in NYC alone).
        I was referring to people making 1/2 or 2/3 of median income. Homes are much more affordable in NYC and Vancouver for someone making 1/2 or 2/3 of median income than in Sydney.
        There is no home in Sydney priced under 5 times dual full time minimum wage, while there are many homes like that in NYC and Vancouver.

        1.7 million Australians working for a minimum wage, do not receive more welfare than someone making the same in USA or Canada but doesn’t have option of buying cheap home ever. For them homes are much less affordable despite Sydney being more affordable in median terms

      • Ahh yea …my point was that direct support for public housing takes these people out of the market for houses bellow the median. whereas in the Aussie system we try to fix the problem with extra money in various forms of welfare/rent support payments. These payments distort the bottom of the market but leave the recipients no better off because the extra cash goes directly to the landlords.
        I’d say the root of the problem is that Americans in general have more pride (and belief) in their ability to provide for themselves without resorting to gov’t support. It’s this pride that creates a social/political environment where NIMBYism (and land regulation) is defeated, with politicians at all levels recognizing the necessity of shelter provision that matches the budgets for all segments of the market.

      • The distribution in Australia from my observations is heavily positively skewed. This also provides strong evidence of a demand/speculation dynamic than a shortage scenario.
        Ridiculous. It is strong evidence of the shortage scenario.

      • @TheClaw

        Ridiculous. It is strong evidence of the shortage scenario.

        Ridiculous. It is strong evidence of the speculation scenario.

      • @ff

        you are right, it’s all speculation driven because low price segment has been hijacked by investors from higher income brackets supported by endless line of credit. These higher income speculators affect both above and below median segments that’s why distribution is so distorted.

        Under normal situation low income earners would not be able to support such a high price in low market segment.

    • I see your point, the median can be “rigged” so that there can be alot of cheap housing (50% of all) and there could be another 50% just above the median mark. So the effect is they may seem more expensive than Sydney, when really, they are not.

      Could it be in Vancouver, the lower end can’t borrow as much? Can anyone confirm if interest only loans are allowed in Canada?

      • IO loans are extremely rare in Canada, less than few % of new loans are interest only.
        On the other hand Australia is ultimate IO place with more than 40% of new loans being interest only

  7. I don’t think the hot Chinese money cares about any of this, it just needs a place to go. I’m sure if you were to add another graph showing ownership by country it would emulate the same trends.

  8. Implicit in all this excellent analysis, is the following reality. Everyone is at risk of some misfortune that will put them under serious financial stress, possibly bankruptcy.

    Elizabeth Warren became a celebrity and got elected to the Senate (and is touted as possible Presidential Candidate material) on the back of her presentations (see YouTube) entitled “The Coming Collapse of the Middle Class”.

    It is ironic given that the USA has so many affordable cities, that her argument is that paying off housing with so much higher percentage of your income for so much longer, greatly increases the risk that that misfortune, when it comes along, will bankrupt you. A disease; an accident; a disabled child; being victim of a crime; losing one’s job – in fact now two incomes are needed for the house, the risk is doubled as only one of the two earners needs to lose their job to put the household into trouble. Marriage breakups are more devastating AND more likely under the added stress of mortgage slavery.

    Elizabeth Warren claims that the data already shows something like a trebling of bankruptcy rates associated with certain misfortunes, and much worse likely to come yet.

    • But Elizabeth Warren is not showing so far that she has any clue about the role that regulations play in making housing unaffordable. Neither do her colleagues or fans in the Democrat Party have a clue. Affordable US cities tend to not have a land racket enabled by planet-saving useful idiots, and tend to vote majority Republican.

  9. Its not rocket science in the end..
    Housing Affordability falls down to, after paying your monthly mortgage, if you have to use your credit card to pay for your weekly groceries, fuel, bills etc because your income isnt enough and thats based on a 25 year principal/interest loan… it means you have a house that you cannot afford.

    You can sacrifice luxuries, health care (skip dentist etc), food (on Maggie noodles and meatless bread etc), if it means you can pay off your mortgage within 10 years… I can see the value in sacrifice.
    But if you are doing those things and you are still projected to pay up the mortgage in 20+ years…. same as above… you cannot afford your house.

    • Cutting back on health risks both higher future costs for health care and earlier/premature death. I don’t like either so will stick with visiting the dentist on a regular basis and eating organic foods. To hell with mortgage slavery, life is too short to make those sorts of sacrifices.

    • +!

      Article says Australians and Canadians are among those queuing up to get one of these French chateaux. I guess this is a process whereby mainlander money slowly makes its way around the globe. Question is, how long before the mainlanders decide to cut out the middle man, and park their cash in France, not Oz or Canadia?

      • I’m not sure they actually can buy there. They’ll probably end up paying extra taxes if is not a ppor.

    • It’s not a fair comparison though. Rural france vs prime Sydney.

      A fair comparison should be Rural French Castle in the middle of nowhere with a probable high maintenance cost and heritage status on it vs rural Australian Castles with the same conditions. Not that many castles exist for buying in Australia, but for a million, you’d get massive amounts of land.

      Another fair comparison is prime Paris (district 1) vs prime Sydney. Anyone have any stats?

      • A fair comparison should be Rural French Castle in the middle of nowhere

        Seriously? The major difference is that we have a lot of middle of nowhere in Aus. You can get to Paris from Abbeville and La Fere via train in ~ 2 hours. You would f***** struggle to get to the city from Parramatta in that time on most days in a car.

  10. A train from Parramatta to Central/Townhall is about 40 minutes.

    Driving into Paris would probably be slower than taking a train too. I’ve been to Paris, traffic can get bad too.

    I do see your point though, the infrastructure network is much better in France than NSW. Middle no nowhere has very limited options.

    Anyone have prime Paris location prices?

  11. Anyone have prime Paris location prices?

    Never fails to amaze how we use the handful of places in the world that are truly world centres as a justification of high house prices here.

    BTW

    These are in Versailles, 25 km out of centre of Paris close to Notre Dame.

    http://www.myhome.ie/holiday-homes/brochure/78320-levis-saint-nom-versailles-france/3120372
    http://www.myhome.ie/holiday-homes/brochure/78310-maurepas-versailles-france/3120249
    http://www.myhome.ie/holiday-homes/brochure/78310-coignieres-versailles-france/3119284

    And these are what you get in Brisbane:

    http://www.realestate.com.au/property-house-qld-springfield+lakes-119383411
    http://www.realestate.com.au/property-house-qld-springfield+lakes-119451391

  12. Strangely enough, generally it’s faster on the train/metro but it took me an hour to get from the centre (louvre’s station) to Versaille via the metro/train system. Google maps directions search tells me it does indeed take an hour and it wasn’t just me.

    Anyway I’m getting caught up in all the minor details. I’m guessing why places like NYC and Paris prime locations are expensive, but not crazy expensive are because people can’t borrow as much as they can in Australia? In particular I think interest only loans are a big factor – I’m lead to believe it doesn’t exist in most parts of the world. Doing interest only tends to allow the borrow to borrow much more?

    • I’m guessing why places like NYC and Paris prime locations are expensive

      The problem isn’t even that Sydney is expensive, it is that everything, everywhere is. Springfield lakes, comparatively is crazy expensive compared to Paris. In centers and Sydney is understandable to a certain degree but this is nuts. The main problem is people just excuse it as being natural. Even well traveled, well educated people (not taking a shot, just my observations).