Champagne Tastes

Apparently renters on average wages are being forced out of Australia’s best suburbs and are facing housing stress, according to a new report released this week.

great-gatsby-champagne

Let me get this out of the way. I’m a tenant. I rent in the nicest part of town I can comfortably afford. If I could afford more, I’d probably rent in a better part of town.

PerthNow and news.com.au have published an article this week highlighting the woes of renters in the light of increasing prices in the inner suburbs of Capital cities around Australia. The article reads;

‘But while rental affordability is an issue in all major centres, the problem is most acute in Sydney where someone earning the national average would have to shell out almost 90 per cent of their income to live in the most expensive suburbs.’

Am I the only one thinking that perhaps renters earning what’s thought to be the average Australian wage should set their sights on accomodation a little less extravagant than a city’s most expense suburbs? Regarding our local market, the article goes on to say;

‘The slowdown of the mining boom has boosted Western Australia’s affordability, with average households spending less than 25 per cent of their wages on rent, well below the level where housing stress would kick in. But the extremes between most and least expensive suburbs was some of the most extreme outside Sydney. More than half the average wage would go on rent in City Beach but Bateman, in the city’s south, would set you back just 12 per cent. Areas to the west of the CBD had the most unaffordable rents.’

Being in my 30’s I can’t really speak of “back in my day” like perhaps my parents could, but ‘back when I first moved out of home’ there was an understanding amongst my friends and I that your first home or first rental simply wouldn’t be as nice, as big or as well located as the family home you grew up in… The home your parents aspired to owning over the course of decades. Today we meet first home buyers demanding tuck-pointing, original jarrah boards, secure off-street parking, beautifully renovated bathrooms and all this within walking distance of their daily Beaufort Street coffee.

‘Adrian Pisarski, executive officer of low-income housing organisation National Shelter, said high rents were dividing Australia.

“It shows what we have known anecdotally for far too long: low income households are being hammered beyond belief [and] moderate income working households are very hard up and have little disposable income,” he said.’

The article states that in suburbs of moderate affordability, renters are spending less than 25% of their income on rent ( well within the range of what’s considered normal and affordable ) so what’s the issue? The article goes on;

‘“More and more first homebuyers just can’t get in and in the private rental markets, lower income earners, in particular, have got very significant affordability problems. There’s just not enough affordable rental accommodation around,”’

Perhaps the issue is that today we simply want what we want and we want it now.  A friend of mine is a mortgage broker. He tells me that it’s uncommon that a buyer with a borrowing capacity of say $400,000 tells him that ‘you can’t buy anything in Perth for under $400,000’ and that prices are just out of control!

There are well over 1000 homes for sale under $400,000 within 15kms of Perth CBD and many of them have been on the market for longer than Perth’s average days.

There are also well over 1000 homes for rent under $400 per week ( approximately 25% of the average Australian wage ) within 15kms of Perth CBD.

It’s not that affordable accommodation doesn’t exist, it’s that we just don’t want it, and that’s fine as long as we don’t expect the rest of the market to adapt.

Maybe our first homes or rentals have to come with morning coffee from the Macca’s drive through instead of Cantina.