Saturday, March 04, 2006

Poor little rich city

Poor little rich city - National -

Sydneysiders' living standards have fallen over the past year, eaten away by higher petrol prices and falling home affordability.

The Sydney prosperity index, the only comprehensive measure of material well-being in Australia's biggest city, also exposes a huge and widening gap between those who own assets, such as property and shares, and those who don't.

The economic quality of life of these 'have-nots' has been sliding for the past two years and they have fallen twice as far from their prosperity peak as the asset-rich.

Sydney is still Australia's most expensive property market and it is still hard for new buyers to afford a home. In last year's December quarter, a worker on the average wage would have needed 492 weeks (9½ years) to earn enough to buy the typical Sydney house, compared with 398 weeks (a bit more than seven years years) in 2000. In March 1987, that worker would have needed 243 weeks (a little more than 4½ years) to earn enough money.

The capacity to pay the typical monthly mortgage in Sydney has deteriorated in the past two years to levels last seen in the early 1990s.

Interesting how governments allow fallout from the stockmarket crash of 1987 to adversely affect so many in the next generation when it comes to buying their own home.

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