Similar property nightmares in Sydney Australia & London UK

 

Similarities between the London and Sydney could not come closer when you examine what the housing market has done to the young and those looking to step onto the property ladder.

 

London property prices are so high that banks have thrown all caution out of the window and are for the first time lending at 5 times a persons salary. This will allow some UK first time buyers access to their first home in their capital city London.  Reality is that London for lower paid workers will never be a place where they can buy property. In fact key workers such as nurse’s,  ambulance staff, police officers and other government workers find themselves completely priced out of the London housing market. The UK government has resorted to help from private industry who have provided creative solutions with low deposit schemes, shared ownership and allocating affordable housing.  

Sydney Australia like London is now a place for gloom for the would-be house owner. During the 1990's the Sydney property market saw an unprecedented boom. Low interest rates along with low inflation meant Australian home buyers had money in their pockets. This money drove up the demand for Sydney’s desirable properties. The Sydney Morning Herald reports that economist Rory Robertson of Macquarie Bank estimates that home prices have risen 75 per cent faster than wages over the past two decades. The average price of an Australian house, including land, has risen from four times pre tax annual wages to about seven times in 20 years.

Today house prices in Sydney have slowed and in some cases dropped however this has made no difference to the hard pushed first time buyer who is finding it too hard to overcome the price rises of the 1990s. It remains to see if Sydney key workers will face the problems of their counterparts in London.

UK property prices like those in Australia have also levelled off. The end of 2006 saw a slow down according to data from the Land Registry for England and Wales. Figures indicate that through November 2006 house price inflation dropped to 6.8% from 7% in October. The most noticeable slowdown was in London, where the annual rate of increase fell back from 9.6% to 7.8%, as average prices fell during the month by 0.6%.