14 MAY 2008:
John Stapleton
TREASURER Wayne Swan’s has declared that the cut off point for the baby bonus and other government welfare payments is $150,000 – based on the theory that families need an income of around $120,000 to get into the Sydney housing market.
John Stapleton
TREASURER Wayne Swan’s has declared that the cut off point for the baby bonus and other government welfare payments is $150,000 – based on the theory that families need an income of around $120,000 to get into the Sydney housing market.
That’s if you’re lucky.
Even families on $120,000 are struggling to buy a home in Sydney now. For a whole generation the dream of home ownership is rapidly disappearing.
Even families on $120,000 are struggling to buy a home in Sydney now. For a whole generation the dream of home ownership is rapidly disappearing.
Financial consultant with mortgage brokers Smartline Kevin Lee said both the Prime Minister and the Treasurer clearly had no idea what was happening in the Sydney property market.
“Even with a combined $120,000 that is cutting it very fine for most Sydney suburbs,” he said. “To come out and say these things is pretty dangerous stuff. These guys have no idea of reality.”
He said the median Sydney house price of $560,000 meant most people were paying well over $4,000 a month on their mortgages. “That leaves you almost nothing to live on,” he said. “You have credit cards, petrol costs. If you’re on a combined income of $120,000 you are clearing $1788, which after losing $1,000 plus in the mortgage doesn’t leave you much to live on.
He said to buy a very ordinary unrenovated terrace in Redfern in Sydney would set you back around $4359 a month on the mortgage, even assuming you could save a ten per cent deposit with the present high rental market.
Computer programmer Tony Haryanto, 33, bought a unit with his wife Kartimi, in the inner-southern suburb of Rosebery in Sydney late last year. Even though the couple are both working and pull in a combined income of around $120,000, like so many others in Sydney they are struggling to cope. The unit cost around $400,000. Repayments are around $2500 a month for the interest only.
“We don’t live a luxurious lifestyle,” he said. “I don’t go ou for lunch, I always bring my lunch my home. I never have coffee at a cafe. We are still on a tight budget. We do our shopping at K-Mart. We look for cheaper clothes.”
“If our boy gets sick for a week then we lose my wife’s income, which makes it almost impossible.”
Director of Mates Rates Mortgages Michael Lee, who supervised Mr Haryanto’s loan, said unfortunately not enough is being done to help borrowers. “What’s needed is major reform,” he said. “We believe a broad-impact mortgage relief plan is crucial. Every Australian has the right to secure affordable housing and home ownership should be more achievable.
Director of Mates Rates Mortgages Michael Lee, who supervised Mr Haryanto’s loan, said unfortunately not enough is being done to help borrowers. “What’s needed is major reform,” he said. “We believe a broad-impact mortgage relief plan is crucial. Every Australian has the right to secure affordable housing and home ownership should be more achievable.
“Unless you have a substantial deposit, even on an income of $120,000 you are now very limited in where you can buy in Sydney.”
Senior economist with the Housing Industry Association Harley Dale said you would be struggling to pay for an average house in Sydney on an income of $120,000.
“It has become too expensive for a lot of people,” he said. “Even if you were trying to buy an average price home in Sydney and if you could save a 20% deposit of $140,000 then you are looking at monthly repayments of $3700 a month.
“No one on an average income paying sydney rents can realistically save that sort of money.”