amazing to think the average Finnish home is the size of a typical 1 bed apartment in Australia.
I live in a suburb where 80sqm apartments regularly sell for over $500K.

Whilst I have never heard of a Finnish real estate bubble, I very much doubt that the Finnish have even heard of Australian real estate!
Sure, but many economists in the US and…[Read more]

If the index is 100, the household uses 25% of its gross income for loan servicing. The lower the figure, the better the household’s ability to buy a home.
So with Helsinki at 51.3 the household is using around 13% of its gross income to service the loan. That doesn’t sound too unaffordable to me.

I have to say, I don’t recall seeing any…[Read more]

The number you quote for Helsinki (51.3) is actually a ratio of house-price to loan-servicing-costs-per-month. The numbers for Australia, UK, USA etc are ratios of house-prices to incomes.

http://www.nordea.fi/eng/info/news/20050217.ASP?navi=yritysinfo&item=news

With rents at such low levels it could be said that renters are getting a free ride on the coat tails of homeowners.
Do you think its possible the rents are reasonable and its the house prices that are high?!

I thought prices were declining in NSW though, or is that not correct? IF there is a bubble I understand it is deflating anyway.

Growth in house prices have outstripped growth in incomes for 6-7 years now. House prices have to come back to the long-term trend line either by falling quickly or remaining flat for many years. I suspect a gradual,…[Read more]

foundation asked:
Do you have any idea why Demographia does not seem to include the UK / Europe?
I found some UK figures here:
http://news.bbc.co.uk/1/hi/programmes/inside_money/3132575.stm

Admittedly its a bit out of date (August 2003) but it shows that UK house-price-to-income ratios range from 2.3 (North East) to 4.8 (London). Certainly…[Read more]

Yes, the whole point of the Demographia website is to push their anti urban consolidation agenda (aka “Smart Growth”) but I don’t think that completely discredits their observations about Australian housing market. Their most unaffordable city (Los Angeles) is hardly a prime example of urban consolidation!

BTW, Today’s SMH draws comparisons with…[Read more]

superman – so your point is that the affordability situation in Brisbane is actually worse than the Demographia figures suggest?

BTW, I had already made this point in another post: Sydney is even less affordable when you consider that mortgage interest is tax deductible in the US, US interest rates are considerably lower, and US personal income…[Read more]

This is the story of how the Demographia affordability rankings came to be:
http://www.demographia.com/dhi-pavrls.htm

This is where their source data came from:
http://www.demographia.com/dhi-notes200502.htm

I cannot vouch for the accuracy of the survey, or why Brisbane is rated as (relatively) affordable (you can see the figures they used here…[Read more]

Foundation,
Great post about debt-servicing ratios, and good to see someone else reading Henry Thornton

Did anyone see Alan Kohler on ABC TV news tonight quoting the Demograpia Housing Affordability Rankings?
http://www.demographia.com/dhi-rank200502.htm

Re: California
The population of CA is almost twice that of Australia (35 million) and incomes are much higher esp. in and around San Francisco and LA.

Re: German real estate
House prices have been flat or falling in Germany for some years:
http://money.cnn.com/2004/11/11/real_estate/investment_prop/pf_worldhousing/

Here’s some information about…[Read more]

Re: median prices:
I didn’t say median prices were falling, I was simply making the observation that the gap between house prices and incomes is much larger in Australia than in other countries. Does anyone seriously dispute this?

Re: market meeting what young people can afford:
Immigration will help sustain demand at the lower end of the…[Read more]

I think I posted this in the wrong thread (my apologies).

The most troubling thing about the Australian real estate market is huge gap between median house prices and median household incomes. By international standards the gap is huge. In Sydney for example it requires 8.8 years of median household income to purchase a median priced home,…[Read more]

The most troubling thing about the Australian real estate market is huge gap between median house prices and median household incomes. By international standards the gap is huge. In Sydney for example it requires 8.8 years of median household income to purchase a median priced home, compared with 2.7 years in Houston, Texas.
Source:…[Read more]