There is often a build-up of stuff that comes out of our consultancy work which I think is worth sharing.
Here are three tables that I think are worth sharing.
Capital cities: Household income and house affordability
|Capital city||Median household income||Median detached house price||% income needed to pay mortgage|
|Matusik, Price Finder + ABS 41300. Matusik estimates. Year ending September 2019. Based on a 90%, 25 year variable principal and interest owner occupier loan from a bank. As at October 2019 the applicable annual interest rate was 4.8%.|
Capital cities: Median weekly rent and gross rental returns
|Capital city||Median weekly house rent||Median detached house price||Gross
|Matusik, Price Finder + SQM Research. Prices as at year ending September 2019. Weekly rents as at September 2019. Based on dwelling being rented out for 50 weeks of the year.|
Capital cities: Average new house size + value of approved detached house
|Capital city||Average size||Average price||Average $/m2|
|Matusik + ABS unpublished dwelling approvals data. June Qtr. 2019.|
Several people asked me for the data in table 1, as I raised the need for a better measure of housing affordability in a recent post. Revisit that post here.
Table 2 shows just how poor the generic detached house performs when it comes to rental returns. Little wonder that dual+ occupancy homes are in rising demand and so too are backyard home solutions.
Now if only the planning fraternity and local government authorities would endorse what the market wants. They will. It just takes time. They just seem to be a bit behind the times.
In the past that rang true with regards to small allotments, inner city living, medium/high-rise apartments and I reckon the same will apply to urban infill, backyard solutions and maximising the use of each suburban housing allotment.
The ideal metric here, should be people per hectare, urban planners, not dwellings per hectare.
Table 3 shows that it is very expensive to build in Hobart and Darwin but much cheaper in Perth and Brisbane. These figures are for the basic detached house.
Also building costs are currently rising above inflation – and when you factor in the rising cost of urban land on a rate per square metre basis – it makes perfect sense to get more people living in each dwelling and having more residents occupy every title of land.
We need to change our dwelling designs and how we configure dwellings on new and existing allotments.
Nothing scary here. It is really very simple. It used the be then norm not that long ago. The market wants it to return. The building industry and, more so the regulators, need to understand this.
What’s needed is a shift in mindset.
That is one of the big challenges for 2020.
How best to facilitate infill development and maximise our suburban allotments.