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“RENTING in Canberra remains as affordable as ever” [With poll]

By johnboy - 14 September 2011 19

Laughing at things in CityNews has been a long term hobby at RiotACT, although in the spirit of Napoleon’s maxim “never interrupt your enemy when he’s in the middle of making a mistake” we’ve ceased to comment as much.

This week’s lead story, however seems to be taking leave of reality to a particularly spectacular level.

RENTING in Canberra remains as affordable as ever, according to the latest statistics from the Real Estate Institute of Australia.

The housing affordability report for the June quarter has shown the proportion of income required to meet rent payments is at 16.72 per cent, well below the national average of 24.8 per cent.

When CityNews say "RENTING in Canberra remains as affordable as ever"

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19 Responses to
“RENTING in Canberra remains as affordable as ever” [With poll]
urchin 12:13 pm 15 Sep 11

RandomGit said :

I have to sell my rental property because the amount of rent I would have to charge just to cover land tax puts me out of the the market. It isn’t worth renting in Canberra compared to other states because of land tax and stamp duty. Unless you can but the property outright.

really? land tax is under 1% of the UV of the land and you can’t get that as a rental return? must be a crappy property. perhaps you have to sell because you made a bad investment decision and negative gearing hasn’t turned out to be the party you thought it would be when you’re not getting any capital gains.

in order for the article to be of any value whatsoever they’d have to compare median rents to median renters’ income. i think you’d be looking at a very different picture if they actually did that, but obviously the point of the article is not to present accurate information but to contribute to the echo chamber and hope to convince people that housing in australia isn’t really a disaster on the verge of collapse…

RandomGit 9:55 am 15 Sep 11

I have to sell my rental property because the amount of rent I would have to charge just to cover land tax puts me out of the the market. It isn’t worth renting in Canberra compared to other states because of land tax and stamp duty. Unless you can but the property outright.

Deref 9:20 am 15 Sep 11

arescarti42 said :

These people make me sick.

+1

Self-serving bullshit. Mind you, it’s what they’re paid to do, but anyone who takes any notice of them deserves all they get.

wildturkeycanoe 11:06 pm 14 Sep 11

I am just so glad that I am able to spend 45.83% of my income to pay off my house as opposed to this disgrace of , what, 16.72%?? I was paying over 50% not 3 years ago in rent, which is why I moved interstate for a better life [taking a valuable asset away from the nation’s capital], but came back for family reasons and still compare my mortgage to the rental rip-offs here. This is a B.S. story with B.S. figures. No point continuing with it….lost cause.

arescarti42 10:14 pm 14 Sep 11

Actually the other thing from the article that made me retch was this little gem:

“Ms Lynch says that despite what is happening to economies overseas, in Australia, now is a good time to enter the market.

“There’s been 10 months straight of the cash rate staying the same,” she said. “It’s a very positive climate. You can understand the hesitation, but Australia is in a different scenario.

“We have a strong population growth, a baby boom, financially we are strong and unemployment is low. “It’s very positive.”

What world does Amanda Lynch live in? The cash rate has stayed the same for the last 10 months because it is becoming increasingly apparent that every sector of the economy except mining is going down the shitter.

Population growth is weak, down to 1.5% from 2.2% in 2008, and gee, babies are really great for the economy anyway aren’t they, what with all the houses and plasma screens they buy.

Australians have more mortgage debt now than the Americans had at the height of their bubble, unemployment is low but increasing, the US is on the verge of another recession and the EU is approaching financial Armageddon. How could anyone interpret this as a “very positive climate”.

These people make me sick.

arescarti42 9:51 pm 14 Sep 11

Tetranitrate said :

random said :

Median gross income in the ACT is indeed well over $100k,

No it isn’t.
http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/DBE855896D8CA36DCA2578FB0018533C/$File/65230_2009-10.pdf

Spot on, you beat me to it.

I’d also like to point out that that that $104,416 gross median income figure is gross HOUSEHOLD income. The ABS data also shows that there are on average 1.5 employed persons per household, so individual gross median income is well below $100k.

Of course a lot of that income actually isn’t available to be spent, you take out tax, imputed rents and superannuation contributions and that 16.72% figure is pure bullshit.

screaming banshee 9:42 pm 14 Sep 11

I’m sure some would argue that it has never been affordable and therefore remains as affordable (unaffordable) as it has ever been.

qbngeek 9:12 pm 14 Sep 11

so, based on what I pay in rent, I should be on $2691 a week not the approx $1100 a week I actually get. Time for a payrise.

Tetranitrate 8:34 pm 14 Sep 11

random said :

Median gross income in the ACT is indeed well over $100k,

No it isn’t.
http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/DBE855896D8CA36DCA2578FB0018533C/$File/65230_2009-10.pdf

-Page 26,
the gross median income for the ACT in the 09-10 financial year (which are the most recent ABS numbers) was $2008 per week, or ~$104,416 per year which is hardly ‘well over 100k’.

What’s more these figures are somewhat inflated when you consider that they include imputed rent for owner occupiers plus superannuation contributions, neither of which are really relevant when comparing the cost of rent to what people earn in the immediate term.
(explanatory notes 35 and 19 respectively).
-but hey we can let that slide for now. I honestly can’t be bothered untangling them and anything in the media will have used the same numbers anyway.

-yes it would likely have gone up a little bit since then, but there’s no way in hell it suddenly jumped 30k in the past year.

even if were to accept say, $110,000 as a figure, that implies the weekly rent is $353 given 16.72% number that they’ve used. Again, this is fanciful.

-Citynews is clearly publishing heavily massaged numbers, probably at the behest of one or more RE agents who advertise through them.

random said :

and median rent is more like $400-$450 than $525.

Source? (most of the figures I’m pulling up on google are average unfortunately) Either way there’s no way to put the piece of the puzzle together and get 16.72%.

random said :

(Certainly none of the public servant couples I know have any trouble renting.)

Believe it or not, the ACT isn’t entirely populated by EL1 or higher public servants.

winter 5:26 pm 14 Sep 11

Maybe there are more people sharing the same space in Canberra? I would like to know the rent people pay per square meter to see exactly what we are getting.

random 5:03 pm 14 Sep 11

Tetranitrate said :

proportion of who’s income?

The REIA site mentions median rents and median family income. Median gross income in the ACT is indeed well over $100k, and median rent is more like $400-$450 than $525. If it’s family income, all those dual-income households will pull it even higher. (Certainly none of the public servant couples I know have any trouble renting.)

Watson 4:29 pm 14 Sep 11

$2691pw does not really sound like a median income, even in Canberra.

Darkfalz 4:28 pm 14 Sep 11

We pay about 15% but we share with two strangers while we are saving for a house. To rent this place by ourselves would be 30% of our combined income. A ridiculous article.

Grail 4:13 pm 14 Sep 11

I haven’t raised the rent in my properties for several years. Therefore, they are as affordable (and tenanted) as ever.

Tetranitrate 4:04 pm 14 Sep 11

proportion of who’s income? I don’t have a figure of average rent for the territory that won’t be disputed to all hell on hand, but if you backward engineer that ‘proportion’ with anything remotely reasonable, you’d getting well over $100,000 and probably over $150,000 per year for your average income depending on what they used for average rents.

going off:
http://www.propertyobserver.com.au/residential/canberra-closing-in-on-sydney-median-prices/2011090451409

canberra was $524/week in July.
– for the proportion of income needed to rent to be 16.72%, your ‘income’ (presumably household pre-tax) has to be $162,966 per anum.

There’s probably 20 or 30% of households who do bring in that much, but there’s no way in hell it’s the average.

It’s absurd, even for household income. Same deal for their homeloan repayments down the bottom of the article.

They must be using the Rismark data that includes imputed rents(ie rents home owners ‘pay themselves) and compulsory superannuation contributions as income.

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