Quote:
Originally Posted by thro
A factor of 5-6x earnings (eg, 300k for 50-60k/yr), and you're looking at property being considered "unaffordable" (or rather 'not easily affordable').
In Perth, we're seeing property prices significantly above 6x earnings. often 8-12x earnings, and its pretty damn hard. Our property values, when compared to median income are actually worse than many areas of europe, america, etc. Some of the worst in the world, in fact.
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I've got an idea - don't spend 8 to 12 times your earnings on buying a property. Little wonder first homebuyers and retards who can't do simple maths and household economics are now losing their homes when they couldn't realistically afford them in the first place. Banks should have known better when giving these people finance but now it's all coming back to bite them on the arse as per the US banks' exposure to sub-prime lending and henceforth available credit to Aussie banks being tightened.
Higher interest rates at the moment are having the effect of rationalising the borrowers out of the market place who were probably over committed right from the word go. Anyone with half a brain would have made an allowance for at least one rate rise in doing their affordability sums.
