Spare parts

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.

Table 1
Capital cities: Household income and house affordability 

Capital city Median household income Median detached house price % income needed to pay mortgage 
Sydney $148,750 $877,000 36%
Melbourne $125,500 $701,000 35%
Brisbane $116,250 $544,000 29%
Adelaide $107,250 $471,000 27%
Perth $133,500 $475,000 22%
Hobart $101,500 $458,000 28%
Darwin $155,000 $485,000 19%
Canberra $140,250 $688,000 30%
Capital cities $130,500 $645,000 31%
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%.

Table 2
Capital cities: Median weekly rent and gross rental returns 

Capital city Median weekly house rent Median detached house price Gross 
rental yield 
Sydney $680 $877,000 3.9%
Melbourne $530 $701,000 3.8%
Brisbane $460 $544,000 4.2%
Adelaide $400 $471,000 4.2%
Perth $440 $475,000 4.6%
Hobart $435 $458,000 4.7%
Darwin $505 $485,000 5.2%
Canberra $630 $688,000 4.6%
Capital cities $500 $645,000 3.9%
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.

Table 3
Capital cities: Average new house size + value of approved detached house

Capital city Average size Average price Average $/m2
Sydney 279 $361,500 $1,295
Melbourne 261 $373,250 $1,430
Brisbane 228 $289,250 $1,270
Adelaide 207 $269,000 $1,300
Perth 278 $289,000 $1,040
Hobart 171 $299,250 $1,750
Darwin 200 $350,000 $1,750
Canberra 269 $376,500 $1,400
Capital cities 254 $332,750 $1,310
Matusik + ABS unpublished dwelling approvals data.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.

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