I think the proportional relevance of the “average” income in the cities is a bit of a red herring also. For example, I am working almost 10 years in an industry and don’t even earn half the Dublin “average” shown in that report. I don’t know how well paid most posters here are, but to me the starkness of affordability is more relevant in comparison with the average industrial wage i.e. €32,000.
The information in this article refers to the Demographia 2008 survey which you can find here demographia.com/dhi.pdf if you’re interested.
The income levels they refer to are actually average household incomes, not individual incomes, so they are probably fairly on the ball.
EDIT*: xman has cleared that one up.
Ah right, that makes more sense. Cheers.
The author of the article dropped the ball by not clarifying that
I was chatting to some friends in Sydney about this yesterday.
Average wages are not like for like though. The same job in both countries ( at least at my employer) pays almost the same. It mightbe 10% less in OZ but certainly not 60% less as per these figures.
Look at what you actually get for the average house price in Sydney compared to Dublin ( domain.com.au vs daft.ie)
I found a nice 2 bed appt by the beach in what is proabably the most exclusive suburb in Sydney or an ok 3-4 bed free standing house on a decent plot in a good suburb on the north shore ( good transport, schools, golf courses)
What does 350K buy you in Dublin again?
It is expensive yes but it is chalk and cheese. My lasting impression when I was there in October was how much further they could pottentially push their market based upon Ireland and the UK; it looked like 2003 overpriced not 2007!
I always felt Dublin’s expense was underestimated by many surveys. Mind you, if all you’re buying is Big Macs then you’re not casting a very wide net.
Comparing Dublin to Melb/Sydney using the Big Mac index, Dublin is about 60% more expensive than Australia.
The nominal price of a big mac meal is about the same in both countries, the difference being the EUR/AUD exchange rate.
The reason for prices being lower is a combination of lower incomes and much higher interest rates. Where would Irish house prices be if mortgage interest rates were over 8% ??? Also property investors have a very unfair advantage over homebuyers in terms of mortgage interest relief with a very strange ‘negative gearing’ taxation policy, basically there is no tax relief for purchase of PPR - which reduces affordability somewhat.
Housing affordablility in Australia is unquestionably worse than Ireland.
On the plus side, the quality of life is much better and the standard of accomodation/infrastructure is much higher, so although houses are more expensive (relatively) they are also much better value for money. It’s not just how much you pay, it’s what you get for your money. The Demographia survey fails to take this crucial point into account (and interest rates!) with their simplistic average house price/average household income affordability measure.