_{0.55 – Dave kicks off the episode! Mike’s company, MCG Quantity Surveyors, recently released a comprehensive report on this very topic – affordable housing in our capital cities.}

_{7.13 – Dave sheds light on why “house price to income multiples” is a bit of a blunt instrument.}

_{12.45 – Why does Cate think affordability has no correlation with investment-grade?}

_{14.10 – Next week’s teaser: our own experiences as first time buyers!}

_{21.30 – What does the data tell us?}

_{25.10 – Gold Nuggets}

Mike’s company, MCG Quantity Surveyors, recently released a comprehensive report on affordable housing in our capital cities. The report focuses on the lower 25% of the property market across Australia’s major capital cities. MCG wanted to identify what’s truly “affordable” in each market by analysing the 25th percentile of sales prices. This approach gives a clear snapshot of the most budget-friendly properties currently available, which is crucial information for anyone trying to navigate today’s challenging market.

Cate steps through some of the median prices around our nation and she contrasts Sydney against Perth. Mike asks, “How many years of income it would take to purchase a median priced home in the market?” House price to income multiples are a reasonable measure of affordability, and the multiples for both houses and units across the two cities is fascinating.

Contrasting other cities is intriguing too; Perth vs Hobart requires more consideration than just income multiples. There is no doubt that the metric is a bit of a blunt instrument, though.

Are there specific areas within our cities where affordability is better, or is it tough across the board?  In Sydney, for example, regions like the Outer South West, Central Coast, and the Outer West and Blue Mountains offer more affordable options compared to the inner suburbs. These areas typically offer a more suburban or semi-rural lifestyle, which tends to come with a lower price tag. In Melbourne, the western suburbs such as Werribee and Tarneit are also known for being more affordable, particularly for houses. These areas are popular among families and first-time buyers who are looking for more space without the hefty price tag of inner-city living.

“Mike, for someone looking to buy or invest, where should they be focusing their attention?”

Despite the strong recent growth, Perth still rates. Tune in to hear why….

Cate prompts Mike to share what the data means for the future of affordable housing in Australia. Affordability varies significantly not just across the country, but even within individual cities. It’s crucial for buyers and investors to understand these local dynamics and to do their homework. While the headlines often focus on the un-affordability of the major capitals, there are still opportunities out there if you know where to look.

The data really emphasises the importance of being informed and strategic in your property decisions. Whether you’re buying your first home or looking to expand your investment portfolio, understanding the market is key to making the right choices.

.…. and our gold nuggets!

Mike Mortlock’s gold nugget: Median house price to income multiples challenge some buyers and Mike showcases the opportunities that quality units can provide when considering the lure of inner-ring, blue chip suburbs.

Cate Bakos’s gold nugget: With all of the changes we’re seeing at local council level, it will be interesting to see how the affordability measure changes with higher density developments that are closer to CBD.

Dave Johnston’s gold nugget: “Always flip it around to your own situation, your own economy and your own price point in order to work out what the best investment is for you.”

Resources:

Mike’s MCG Quantity Surveying report: https://www.dropbox.com/scl/fi/cqixnmo65ji9457ptwp0r/MCG-Quantity-Surveyors-July-2024-Best-inflation-busting-property-investments-in-each-state.pdf?rlkey=2awae0c9dyhi9lezflx2xem4h&st=t4oih2pv&dl=1

If you’ve enjoyed this show, you may enjoy these episodes:

• 21 – Why price point should determine location and strategy
• 27 – How many properties do you need to retire wealthy?
• 31 – Get rich quick schemes – No.1 of the top 7 Critical Mistakes
• 36 – Buying the wrong property and/or the wrong location – No. 6 of the top 7 Critical Mistakes
• 244 – Tackling Housing Affordability – Part 1: Dissecting Proposals for Housing Innovation
• 246 – Tackling Housing Affordability – Part 2: The Trio’s Blueprint to Foster a Healthy Property Market