Australian Property News
Key workers locked out of capital city investment
Posted on Tuesday, July 28 2009 at 11:14 AM
Almost 80 per cent of capital cities are now too expensive for key workers to invest in, compared with less than 70 per cent in 2004.
According to the latest Bankwest Financial Indicator Series Report, an area is classified as unaffordable if median house prices are more than five times a worker’s annual earnings.
"Even more worrying," said Bankwest retail chief executive Ian Corfield, "is that affordability has declined over the past five years, despite a minor improvement in housing affordability last year."
The report results illustrate that of Australia's 480,000 key workers, nurses, who represent a contingent of 172,000, face the greatest affordability crisis, being pushed out of 98 per cent of capital city local government areas.
Other occupations include teachers (244,000), police officers (44,000), fire and emergency employees (11,000) and ambulance officers (9000).
"The unfortunate reality is many are locked permanently in the rental market and are unlikely to get the keys to their own home while others have to commute for hours," said Corfield.
While there appears to be an affordability crisis, the global financial crisis has created a modest relief for key workers in all capital cities excluding Darwin.
Perth remains the most affordable capital city for key workers during the past year, with the median house price to key worker earnings ratio dropping 1.2 years to 6.3 years.
Editor of Australian Property Investor magazine Eynas Brodie said the Federal Government's new National Rental Affordability Scheme aimed to help key workers across the country to at least afford to rent close to their place of employment, but more needed to be done in terms of affordable home ownership.
API published an extensive report about the National Rental Affordability Scheme and the benefits for renters – as well as the financial incentives it offers to investors – in its July edition.
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