Property has definitely gone up, but we don’t see this as anything approaching crisis level. Things have gotten tougher all over the world. I think we’re still pretty fortunate in Western Australia.
Perth, Western Australia (PRWEB) September 20, 2012
A recent WA Today article, entitled “Census reveals extent of soaring mortgages, rent” cited recent census statistics and presented a picture of a “housing crisis”. The Mortgage Gallery Rockingham sharply disagrees with some of the conclusions, and points out a few flaws in the reasoning presented in the article.
The article cites census statistics that the median mortgage repayment is now close to $2,000 a month, up 58% in five years, with renters paying almost twice what they did in 2006. They then point out that the median wage has increased by “only 32%”.
The article then points out that 10% of Western Australian households are in “housing stress” which is defined as a household paying more than 30% of its income on housing. The article also says that households spending less than 30% of their income have decreased from 92.2% to 89.8%.
According to James Eaves, mortgage broker at leading mortgage broking firm The Mortgage Gallery Rockingham, the numbers are solid, and well within societal norms: “Property has definitely gone up, but we don’t see this as anything approaching crisis level. Things have gotten tougher all over the world. I think we’re still pretty fortunate in Western Australia.”
Eaves continued, “I would like to see numbers from other countries. I would be willing to bet that our 10% of people in housing stress would stack up very well against the rest of the world. One of the great things about mortgage payments is that, while income rises over the years, the mortgage payment remains the same. If those who are in housing stress now can hold the fort for a few years, they will probably find that they are doing just fine as their wages go up.”
Eaves then said, “Look at the statistic involving households spending less than 30% of their income on housing. The number went down 2.4%. While I certainly feel for anyone who has to struggle to make ends meet, a decrease of 2.4% in five years is not bad, especially considering how bad the last five years have been for so many people.”
The article goes on to cite some more housing figures. The median mortgage payment is now $1950, which is an increase of $737 over the previous census. Median weekly rent is now $300, up from $170. There are now 40,000 more renters, which works out to 2% more. The article also cites 109,328 unoccupied private dwellings. This is 12.1%, compared to 11.5% in 2006. The article said the number “jumped” and later referred to a “housing crisis”.
According to Eaves, “I’m not going to stand here and deny that things have gotten tougher for all of us, but statistics are often in the eye of the beholder. For example, a 0.6% increase is not a ‘jump’. Medians and averages are fine, but medians don’t always match up. For example, the median wage earner usually doesn’t own the median house. Comparisons of medians are inaccurate here.”
Eaves concluded, “We can all agree on one thing about the numbers: it’s definitely a good idea to get some professional advice when buying a home.”
James Eaves and The Mortgage Gallery Rockingham will be happy to give you solid, professional advice. Their mortgage brokers will help you find the right home loan for you in the Rockingham, Kwinana, and Cockburn areas. For more information, James Eaves’ website can be found here: http://www.jameseavesmortgagebroker.com.au/ or you may call him at 0400 204 408.