Housing Affordability in Sydney

Peter Costello, the Treasurer of Australia, will announce a board enquiry into the cause of rocking housing price today to address the deepening home affordability crisis, especially in Sydney today, read it on The Sydney Morning Herald...

Sometimes on Wednesday nights, when Vivian and I were having dinner, we will be browsing the just-arrived weekly local news paper, the Southern Courier. Southern Courier is a funny local paper, as almost half of its content is advertisements on the local Eastern suburb properties. So sometimes we will just browse through and put comments on each of the house/semi/apartments advertised in the paper. There is also an auction section that shows the recent sold price on the previous advertised properties. What has been striking us is the actual housing price. Now days when we looked at a house advertised in the paper, Vivian and I started guessing how many "mils" this house is going to cost. Sometimes it is just ridiculous, to a point that I wonder whether anyone can afford their first home.

So a 3 bed room free standing house in Kensington might cost AUD$800,000. Using a load calculator, with 6.57% rate, borrowing $600,000 from the bank (that means at least $200,000 in deposit, plus tax and stamp duties, etc), and that will result $4,077.53 monthly payment for 25 years. To generate that much money each month, you need a job that pays at least AUD$70,500 annually because of the tax - and you don't get to spend a cent with the money you have earned as they all go into the mortgage. And with the financial down turn every few years, who can guarantee that you get to keep the same high paying job for 25 years?

And that probably means double income for the house hold is no longer optional, but an requirement. So the parents spent most of their day at work trying to make enough money to pay for the mortgage, and children got less attention at home. Other problems might arise when they grow up, when they never receive the same amount of parental love that their previous generation has received. On the other hand, if you keep on renting, retirement can be a problem as certain amount has to be set aside for the rent. Living quality might become sub-standard to the elderly.

So, how to increase the affordability of home in Sydney. You can increase the interest, so that it discourages the rocketing price of Sydney properties. However it might not make the house more affordable, as people still need to pay high interest for their mortgage. Other way to drive down the demand would be developing more residential area on the outer rim of Sydney, so that people don't have to buy right in the heart of CBD. But then people have to travel hours between home and work/school everyday. Having been able to travel from home to work by car in less than 10 minutes, I don't really want to live too far away from the CBD.

But for us, I think the real struggle is from church ministry. Phillip has said it. Joshua has repeated a couple of times, and in MYC this year, Paul has said it as well. Priority - seek the church you want to serve first, find a job close-by so that it can support the ministry, and then find a place you can live in. That means, if we are serving FOCUS and University Churches, then we need to live somewhere close to the Kingsford/Kensington/Randwick area, which I think we will never be able to afford. Having a place close by is very useful, as we can run meetings, inviting people over for dinner, etc, and it is the convenience we have experienced with our current apartment. Just that we might never be able to afford something of our own, and that can sometimes be discouraging when you see some FOCUS families getting their own home 45 minutes drive away...

Now even my parents are worried (as they are non-Christians). Everytime I talked to them on the phone, they will definitely ask two things - when are we getting a baby and when are we buying a home. -Sigh-.

Need continue prayer for wisdom...