Monday, 7 February 2011

Unaffordable housing?

I enjoyed Terry Ryder's column Unaffordable? Nothing of the sort in The Weekend Australian. Some quotes:
The report on which these claims are based is a document believed by some to be designed to harass government into giving property developers a free hand. The Demographia report arrives at its conclusions by comparing Australia with just six other countries and by adopting narrow parameters. It uses the results to campaign for an easing of regulations.
Surveys show journalism is among our least trusted professions because many journalists do not do their jobs with integrity.
The Demographia report's methodology is questionable. It uses a median multiple -- the median house price divided by gross household income. If banks used this system to determine affordability, they would lend to almost no one.
Perhaps the worst element of the report is the use of an arbitrary system of ranking locations as "affordable" and "unaffordable". Only locations where a typical house costs less than three times average income are deemed affordable.

1 comment:

  1. The trouble with Terry is that he already has a house. Housing in Australia is only unaffordable if you don't own a house.