S2E3: How Much You Need to Earn in Each Aussie Capital City to Buy Property

In this episode, Joe and Michael get into how much you have to earn to buy a property in each Australian capital city in order not to feel financial stress. Additionally, they discuss which jobs allow you to do that easily. Spoilers, there aren't many. 

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Transcript

00:00:04:03 - 00:00:18:22
Michael
Hey, guys. Welcome to the finance show with Joe. He's Joe. I'm just some schmo. And today we're going to talk about what jobs you actually need to be able to afford anything in Australia's capital cities, particularly Sydney. That's just because where we're from. Aren’t we.

00:00:18:24 - 00:00:40:02
Joe
this show is going to be ridiculous. I've just got to be honest and upfront. I kind of noticed over the last few months, I've been working extra hard. Like, I run my own small business, I run multiple small businesses, and, I've really started to figure out what. And that's because I need to earn more money to be able to afford just living in Australia.

00:00:40:02 - 00:00:58:05
Joe
Yeah, and it doesn't make sense to me. It's like just genuinely does not make sense to not excel to live in Australia. Yeah. You now need to be earning these exorbitant amounts of money just to be able to afford a home, to be able to buy groceries.

00:00:58:05 - 00:01:30:06
Michael
Yeah. And we have figures for this. The ABC just released a study. I'm not actually sure who ran the study. My bad. but anyway, so, like, the numbers are as follows. I'm just going to round it. Round it up or down? Sydney, you need $293,000. Canberra. 205,000. Melbourne. 190,000. Brisbane. 178,000 Adelaide 164,000 Hobart 149,000 Perth 140,000 and Darwin 124,000.

00:01:30:09 - 00:01:31:21
Michael
That's ridiculous.

00:01:31:23 - 00:01:40:15
Joe
Just to be able to buy a home. Yeah. In these capital cities, that is now the rate of affordability.

00:01:40:15 - 00:01:44:09
Michael
I’m moving to Newcastle. It’s Over.

00:01:44:11 - 00:01:47:08
Joe
I'll do you want better? I'm moving in Yugoslavia. This doesn't even exist anymore.

00:01:47:08 - 00:01:48:18
Michael


00:01:48:20 - 00:02:00:08
Joe
How do how do we make it make sense? And there's so many trends and there's so many reasons why the housing affordability has gone up or the income needed to afford a house has gone up.

00:02:00:09 - 00:02:03:17
Michael
Yeah, I'm certain it's widely accepted that it's just a supply and demand issue.

00:02:03:18 - 00:02:04:04
Joe
But it's.

00:02:04:04 - 00:02:05:10
Michael
Not it's not just not.

00:02:05:10 - 00:02:29:13
Joe
Just supply and demand, because we also have interest rates that are contributing quite heavily into this. Previously in, let's say, 2018, when I was writing loans, if somebody was on $80,000 a year, they could borrow five and a half, six times their annual income to be able to afford a property. So if you're earning 80 grand, you'd be able to purchase something with $480,000.

00:02:29:13 - 00:02:43:17
Joe
Back in 2018, you could find two bedroom apartments in Sydney for $480,000. Yep, that is becoming less and less prevalent. And the first issue we need to discuss is interest rates.

00:02:43:21 - 00:02:44:14
Michael
Yeah.

00:02:44:16 - 00:02:54:13
Joe
So interest rates have stayed at 6%. And there's even talks of the interest rates going up to steady inflation.

00:02:54:15 - 00:03:16:11
Michael
Yes I and I and I, I read I read that apparently dropping interest rates won't fix the issue either. because apparently if we lower the interest rates further, it'll make things worse in the long run. And this is, however, this is according to the federal Bank of Dallas. Okay. So this is a US thing. And they found that higher rates made life harder for home buyers.

00:03:16:11 - 00:03:20:04
Michael
But affordability would have been worse because house prices would have gone up even further.

00:03:20:04 - 00:03:48:02
Joe
But this is the issue because interest rates go down, there's a supply and demand. okay. If interest rates go down, more people at the lower income brackets will be able to afford homes at the same time on the supply side properties. Okay. we're not supplying as many properties as we used to. Yeah. So I think it's that came out the other day, 100,000 new people came to Sydney, or a hundred thousand new people came to Australia, and only 10,000 new dwellings were approved.

00:03:48:06 - 00:04:00:21
Joe
Do they expect ten people to live in every dwelling like it? Like, are we back in the old country and, you know. Yeah, is in the kitchen. She's not being like, you know, she she's cooking ready for an army.

00:04:00:21 - 00:04:04:18
Michael
Like pull up, pull out your single bed from the cupboard and share it with your brother and sister.

00:04:04:20 - 00:04:22:24
Joe
Oh, man. I've got a story from my dad. Dad grew up. He was an immigrant. And, in his house, they had one room and they had all the mattresses stacked up every single day in the corner. And they'd pull those out and they'd sleep on them. The difference is, he was living in a third world country. We aren't extremely developed country.

00:04:23:00 - 00:04:25:23
Joe
Yeah, with some of the highest GDP in the world.

00:04:25:23 - 00:04:26:06
Michael
Yeah.

00:04:26:06 - 00:04:49:24
Joe
And because of the supply issue, we're not supplying enough housing. we're getting all this pushback. So I want to start with Darwin, Perth, Hobart and Adelaide. Now the cheapest on the list, the cheapest on the list. Now, I don't want to, degrade the people that live in these capital cities because we need people to live in them.

00:04:50:01 - 00:05:03:10
Joe
Perth is the western seaboard. It's the only major capital city on, you know, the western side of Australia. And a lot of people don't know this, but the western part of Australia is like double the size of continental Europe or something like it's gigantic.

00:05:03:12 - 00:05:08:16
Michael
It's absolutely massive. Yes. There's a reason why they at one point they considered seceding and becoming their own country.

00:05:08:16 - 00:05:22:00
Joe
Yeah. It's it's not one point that happens all the time. It's like not we're going to be coming to our own republic until iron ore drops in price. And all of a sudden it's like, hey, Sydney, you know that finance you do. We need we need a little bit of that.

00:05:22:02 - 00:05:23:01
Michael
That education you sell.

00:05:23:02 - 00:05:45:11
Joe
That's exactly right. But, wha these states, these, these major capital cities, they are needed because not everyone is working as, finance professional. No, not everyone is working as a solicitor. people want to work in the mines. People love manual labor. Everybody. But you see what I mean? So we need people to live that. But even in those capital cities.

00:05:45:11 - 00:06:11:06
Joe
So I'm just going to list them here in Darwin. $124,337 just to live in Darwin. To me, that is absolutely insane. For six months of the year, living in Darwin is torture. It's torture. It's flooding. It's raining all the time. It's humid. Yeah. You don't know what's in the water, what's going to kill you? Like, you know when.

00:06:11:12 - 00:06:13:05
Michael
We know it's capital crocodiles?

00:06:13:07 - 00:06:17:05
Joe
No. You know when, Americans always love making fun of Australia or everything's coming to kill you.

00:06:17:05 - 00:06:17:20
Michael
That's Darwin,

00:06:17:21 - 00:06:20:10
Joe
that's just Darwin!

00:06:20:12 - 00:06:26:11
Joe
In Darwin right now, it's $125,000 to be able to afford a home.

00:06:26:16 - 00:06:27:07
Michael
Yeah.

00:06:27:09 - 00:06:33:16
Joe
That doesn't make sense to me because Darwin also has the largest amount of Indigenous Australians.

00:06:33:18 - 00:06:40:08
Michael
Yeah, that's got to be rough too. Just given the socio, socio political reasons like, you know, with income and stuff like that, just.

00:06:40:08 - 00:06:53:01
Joe
Adjust on pure socioeconomics. The most people in Darwin can't afford a house. Yeah. The next on my list is Perth. Perth is at $140,313.

00:06:53:02 - 00:06:54:23
Michael
At least there's a reason to live there though.

00:06:55:00 - 00:07:01:17
Joe
We've got the mining towns, we've got the western seaboard. I don't know if you've seen Perth Tourism, how much money they're putting into it now.

00:07:01:19 - 00:07:04:06
Michael
Yeah, it's a nice city. It looks nice. Yeah.

00:07:04:08 - 00:07:09:15
Joe
the sunsets, it's there's reason to live in Perth. The mining especially.

00:07:09:16 - 00:07:12:00
Michael
Yeah. That's the that's the, the biggest reason people live there.

00:07:12:00 - 00:07:33:04
Joe
So the thing about Perth is Perth is probably the only city that you're going to be living in where you can have a blue collar job. And I'm not saying self-employed. You're a plumber and you've got your own ABN. I'm talking the blue collar job. You are working in mines, but you're working for someone else. Yeah, it's probably the only place where you can afford a property and at the same time start making money on top of that.

00:07:33:04 - 00:07:42:15
Joe
Like you're you're receiving a higher income because of it. I have friends that drive the trains in Perth, those massive trains that contain all the iron ore installed.

00:07:42:15 - 00:07:42:23
Michael
Yeah.

00:07:42:23 - 00:07:45:07
Joe
All that stuff. So and they own a bloody good wicket.

00:07:45:07 - 00:07:46:05
Michael
Yeah, 100%.

00:07:46:05 - 00:08:02:17
Joe
But there's absolutely nothing to do outside of that. they've got the Crown Casino there and that's all it is. And as much as I love Perth and I love WA and I love, you know, all the natural beauty that does, yeah, yeah. Why does it cost $140,000 for people to live there?

00:08:02:19 - 00:08:17:22
Michael
Yeah, that's that's kind of confusing, especially because, Perth has been on the up and up in recent years as well. There's been a lot of investment into Perth, but for a variety of reasons. It's not just like, oh, because there's mining, like you said, tourism and stuff like that. yeah. No. It's interesting. I don't really understand.

00:08:17:22 - 00:08:36:15
Joe
Why would you like to live there if your girlfriend turned to you and said, Michael, I want to, I want us to up and leave to Perth. Would you be satisfied with the amount of culture, with the amount of things to do, with the amount of amenities in that location for your particular lifestyle? Yeah. Would you be happy with that.

00:08:36:17 - 00:08:57:08
Michael
Is a tough call, because part of me is like, wants to be a little home and just never leave my house. I guess in that sense, yeah, it'd be fun in another sense, though, I'm not like that every weekend. And then then I'm going to run into issues in the long term. Yeah. And I do like to go do stuff, you know, go see gigs and stuff like that and like musicians, I mean, the weekend just canceled his Aussie leg of the, of his tour.

00:08:57:10 - 00:08:59:19
Joe
I had no idea. So the Weeknd just cancelled. Just

00:08:59:19 - 00:09:02:03
Michael
Canned. Australia's too expensive. They don't make enough money to do it.

00:09:02:08 - 00:09:03:00
Joe
And that's it.

00:09:03:00 - 00:09:21:12
Michael
Then moves on. I assume that's the case. I haven't really seen any reasons behind it a lot, but it's not. You know, we go to all the festivals and stuff going on. It's just too expensive because regulations so high, which is honestly the same thing that's happening in the property market. That's exactly right. Too much regulation. a long, long building period, long approval periods, you know, all these kinds of things.

00:09:21:12 - 00:09:24:23
Michael
It's the same thing that's affecting, well, basically everything in Australia.

00:09:24:24 - 00:09:34:19
Joe
That's exactly right. for me personally, if somebody said to me, hey, go move to Perth, for me there's an abundance of opportunity. but I know my wife. Okay.

00:09:34:21 - 00:09:35:13
Michael
Not going to be pleased.

00:09:35:13 - 00:09:39:12
Joe
She's not going to be happy because she loves theatre. we don't even have enough of that in Sydney.

00:09:39:12 - 00:09:42:12
Michael
Yeah, yeah, you go to the opera house and that's about it. I own the State theatre.

00:09:42:12 - 00:10:07:21
Joe
Yeah. That's it? Yeah. That's it. The Sydney Lyric Theatre. We don't have much. We don't have, things to tap into. And when I look at Perth, I just go to myself, okay, I understand why it's $140,000 to even live there like you know, there's a lot of mining towns is, you know, minimal builders. Supply and demand is low, but $141,000 a year.

00:10:07:23 - 00:10:10:06
Joe
what job are you going to find there outside of the mines?

00:10:10:08 - 00:10:13:11
Michael
Yeah, I'm not sure. Unless you, you know, run the casino. You're a.

00:10:13:11 - 00:10:15:08
Joe
Journalist? Yeah. You're a copywriter.

00:10:15:09 - 00:10:16:04
Michael
Yeah.

00:10:16:06 - 00:10:19:20
Joe
Next on our list is Hobart. How much do you need to earn to live in Hobart?

00:10:19:22 - 00:10:23:21
Michael
Almost 150. Almost 150. 148, 149.

00:10:23:23 - 00:10:28:05
Joe
You know the reason why it's so expensive to live in Hobart or why property's gone up so much.

00:10:28:07 - 00:10:35:19
Michael
is that because more people are rocking up? And unless people, less buildings are going up? I don't actually know that. Hobart. Honestly, I kind of forget about.

00:10:35:20 - 00:10:40:11
Joe
That's a really good high level answer. Like, you know, you're passing if we start an exam.

00:10:40:13 - 00:10:41:08
Michael
Okay, cool.

00:10:41:10 - 00:10:45:13
Joe
I think short answer is Hobart is considered a regional CBD.

00:10:45:17 - 00:10:48:09
Michael
Oh, yes. We talked about this last week actually, yes we did.

00:10:48:09 - 00:11:07:24
Joe
And because if you work five minutes outside of the regional CBD, you've considered to be doing your rural work. So a lot of people that are coming to Australia to study just go to the University of Hobart or the University of Tasmania. Yeah. And they can apply for their permanent residency so much faster than if they moved to Sydney, Melbourne or Brisbane.

00:11:08:01 - 00:11:11:15
Michael
in contrast to Perth, I actually wouldn't mind living in Hobart.

00:11:11:17 - 00:11:20:05
Joe
Hobart's a little bit better compared to the previous two capital cities that we discussed, because Hobart at the food capital of Australia.

00:11:20:07 - 00:11:23:22
Michael
You say don't do anything for me, but I like the I like the, the nature.

00:11:23:24 - 00:11:43:14
Joe
Well, that might not do anything for you, but someone who's been to Hobart recently with, their wife, I see the investment that they've put into the into the city, and they've invested a lot in the culture. Yeah, the reason is it's a two hour ferry ride, I believe, also from Melbourne to get to Hobart. I don't quote me, guys.

00:11:43:14 - 00:12:01:03
Joe
I'm not 100% sure, but you can drive to Melbourne, jump on one of the car ferries and they'll drop you off at Hobart. And a lot of people from Victoria are taking advantage of this, because Tasmania is the food capital and Victoria's Melbourne nights. What do they love most that love their culture? Yeah, they love their food. They're culinary people.

00:12:01:03 - 00:12:13:11
Joe
They love being able to say to people, have you tried this restaurant? Have you gone and seen this? The whole city is built upon it. Yeah. So Hobart's a little bit different. I would consider living in Hobart just because I really like the climate.

00:12:13:13 - 00:12:15:01
Michael
yeah. That's a that's my big thing.

00:12:15:03 - 00:12:30:06
Joe
They've got the southern Lights, they've got they've got penguin migration. They've got so many little interesting things that I do enjoy. but in saying that the amount to be able to live there, what jobs are you going to be able to take advantage of?

00:12:30:06 - 00:12:38:01
Michael
Yeah. What kind of work is there in Hobart? I know there's, you know, normal bits and pieces of work that every city has, but like, broadly it's minimal.

00:12:38:05 - 00:12:59:19
Joe
Yeah. They don't have the professional services that Melbourne and Sydney offer. You don't have, you know your big four banks setting up their main offices in Hobart. You don't have your major solicitors or your major marketing companies setting up there. So yet again you have to go into construction or you have to consider moving into a blue collar type of role to be able to afford a property in Hobart.

00:12:59:21 - 00:13:25:18
Joe
Now, I just want to mention one thing. Yeah, just for everyone. This is household income on your own. Looking to purchase a property. This also is you living just scraping by and without any credit cards. Any hex debt or any columns. So I think it's important to clarify that just to kind of show you how expensive it is, because everyone I know has a credit card, everyone I know has purchased a car.

00:13:25:18 - 00:13:33:14
Joe
Previously on finance. Everyone I know has some sort of hex debt, especially if you want to be working in these kind of jobs or earning an income.

00:13:33:14 - 00:13:38:10
Michael
If you want a white collar job, you just have to get an undergrad at a minimum like that. This is no choice. There's no.

00:13:38:10 - 00:13:45:12
Joe
Choice. And then on top of all of that, everybody at one point or another has stuffed up in their life because we're not taught finance at.

00:13:45:12 - 00:13:45:22
Michael
School.

00:13:45:23 - 00:14:03:12
Joe
Now. So there's a good chance that you've had a personal loan to, Hobart, the median house price. So this is the midpoint. What most people are expected to pay is $835,000. So you said it previously. How much income do you need to be earning in Hobart?

00:14:03:12 - 00:14:06:09
Michael
Yeah, $148,948.

00:14:06:09 - 00:14:25:09
Joe
So you need to be on $150,000 a year. No credit cards, no car finance, nothing to be able to afford an $835,000 home. we're going to add some graphic overlays for anyone that's watching this on YouTube or TikTok. $835,000 homes. You're not getting much reward.

00:14:25:09 - 00:14:26:13
Michael
Would you expect two bedroom?

00:14:26:13 - 00:14:36:06
Joe
You're probably going to get a three bedroom house, two two car garage, but it's going to be built 30 years ago. It's going to be something that's red brick. You're not getting something brand new, modern.

00:14:36:08 - 00:14:42:18
Michael
Exciting and a red brick, though at this point I'm desperate.

00:14:42:20 - 00:14:52:04
Joe
Why would you why would you buy property unless you're looking to buy a property to start making money and prepare for your financial future? which not everybody has the mindset to do that.

00:14:52:06 - 00:14:56:20
Michael
Yeah. I mean, I consider it just so it's like, mostly for retirement.

00:14:56:20 - 00:14:58:06
Joe
Honestly, that's exactly it.

00:14:58:06 - 00:15:05:22
Michael
Like, if I can pay that off by the time I retire, at least I have some money. When I have, when I retire, like the pension and my super and whatnot.

00:15:05:24 - 00:15:14:03
Joe
That's another big thing. The pension is so shit now. Yeah, that what are you going to do when you retire? Eight one piece of lettuce a week.

00:15:14:09 - 00:15:17:19
Michael
And yeah, and you got to pay rent on top of that. If you're still renting at that time.

00:15:17:20 - 00:15:24:02
Joe
It's it's insane. Next suburb satellite Adelaide you need to be earning.

00:15:24:02 - 00:15:27:04
Michael
I would also call Adelaide a suburb.

00:15:27:06 - 00:15:29:07
Joe
I can't believe I stuffed up.

00:15:29:09 - 00:15:30:06
Michael
I would call them that.

00:15:30:08 - 00:15:35:08
Joe
Sorry next city is Adelaide. I like Adelaide personally.

00:15:35:08 - 00:15:37:14
Michael
I've never been. I just got good wine country though.

00:15:37:14 - 00:15:43:19
Joe
Good wine. Pretty sure it's the capital of churches. Like there's a church on every other street.

00:15:43:21 - 00:15:45:09
Michael
Yes, I have heard that. Yeah.

00:15:45:11 - 00:15:53:24
Joe
it's the church capital of Australia. It's, you know, they've got the beautiful wineries as well as, in the northern parts of South Australia. Yeah. I'm certain.

00:15:54:03 - 00:15:55:17
Michael
Yeah. It's just north of Adelaide, I'm pretty sure.

00:15:55:18 - 00:16:08:01
Joe
Yeah. And then you've got Glenelg, you've got the beautiful southern beaches. I've been told the beaches in Adelaide are the best in Australia. I don't know why. I could imagine it's the coldest water because it's just facing Antarctica. Like let's go, you.

00:16:08:01 - 00:16:09:03
Michael
Know, like, yeah

00:16:09:03 - 00:16:31:09
Joe
It’s going to be freezing. But to afford a house in Adelaide, you need to be on $163,000 a year. And the median house price is $926,000. Yet again insanity. Because what job are you going to have that pays you $163,000 a year on your own?

00:16:31:11 - 00:16:51:13
Michael
no. It's true. I think at least at least Adelaide has got more going for it in terms of work than Darwin, Perth and Hobart. I we talked about how Perth does have opportunities, but if you're into specific sector. Yeah. I think Adelaide is like an in between basically the east coast of Australia and everything else.

00:16:51:15 - 00:16:55:06
Joe
They've got their own timezone, which is like my little favorite fun fact about.

00:16:55:06 - 00:17:00:11
Michael
Adelaide just looking at Australia's time zone state by states. It makes me angry.

00:17:00:13 - 00:17:11:05
Joe
But you look at Adelaide and you go to yourself, what roles can I go into? They've got a fantastic law sector. I know quite a lot of people that are lawyers and they reside in Adelaide.

00:17:11:07 - 00:17:13:20
Michael
There you go. You can buy a house in Adelaide if you're a lawyer.

00:17:13:22 - 00:17:42:22
Joe
Another thing is they, probably the best city for both positive gearing and capital growth at the exact same time. For our new listeners, positive gearing is when your rental income is outpacing your loan repayments and capital gain or capital appreciation is how much your property is growing by year by year. So Adelaide's probably the city if you want a mix of both.

00:17:42:24 - 00:18:07:02
Joe
Where Sydney is just capital growth similar to Melbourne, Perth is positive gearing, but Adelaide's the best mix that you can possibly find. But even looking at it, you have to really question what is the government doing in regards to new dwellings, because this is absurd, that that was almost called it a suburb. Again, a city like, I don't get it.

00:18:07:04 - 00:18:17:15
Joe
You need to be earning $163,000 just to be able to afford a house. Next on our list is our first major capital city in Australia and that is Brisbane.

00:18:17:19 - 00:18:21:03
Michael
Yeah, $178,000.

00:18:21:05 - 00:18:29:20
Joe
$924,000 median house price. So a little bit less than Adelaide. But the cost of living is higher in Brisbane as well.

00:18:29:22 - 00:18:37:13
Michael
But you get a lot more from living in Brisbane. Well, at least recently. There's a lot of investment going on in Brisbane because of the Olympics and whatnot. We we talked about this.

00:18:37:13 - 00:18:43:10
Joe
I think there's the infrastructure projects for the trains. Yeah. They're finally getting a train grid.

00:18:43:12 - 00:18:45:18
Michael
Do they not have one? I have never been 20.

00:18:45:18 - 00:18:50:13
Joe
24 the year of trains. They're getting some new highways.

00:18:50:15 - 00:18:51:08
Michael


00:18:52:11 - 00:18:54:09
Joe
fantastic weather year round.

00:18:54:11 - 00:18:57:04
Michael
It's too hot. It's too hot.

00:18:57:06 - 00:19:07:10
Joe
you know, the funniest thing about Brisbane is whenever I have, I've been introduced to people that move from Brisbane to Sydney. my first question is, how many jackets did you own?

00:19:07:12 - 00:19:08:14
Michael
yeah.

00:19:08:16 - 00:19:13:01
Joe
And they go. I had two jackets throughout the year. I would wear them in July and August.

00:19:13:01 - 00:19:13:14
Michael
And that's it.

00:19:13:14 - 00:19:16:11
Joe
And that is it. The rest of the time I'm in shorts and t shirts.

00:19:16:11 - 00:19:33:21
Michael
My brother came down just a couple of weeks ago, and he didn't bring any jumpers or jackets because we were in spring now. Yeah. Oh no. I'm sorry. Yeah. we're in autumn now. And it was, he was like, it's fucking hot in Brisbane. Yeah. Fucking freezing. It was. It was freezing. We went to the Hunter Valley.

00:19:33:21 - 00:19:35:08
Michael
It didn't stop raining.

00:19:35:10 - 00:19:36:10
Joe
He wasn't prepared, was he?

00:19:36:10 - 00:19:38:05
Michael
He was not prepared even in the slightest.

00:19:38:07 - 00:20:02:02
Joe
But, I can understand why Brisbane has become a little bit more expensive. but even they have struggled to get developments approved or buildings approved. So to get a degree in Brisbane or development approval is much faster than in Sydney. But to get the building approved itself is a longer process. So they have the Olympics coming up.

00:20:02:04 - 00:20:08:06
Joe
They don't know if they're going to be able to house everyone for these Olympics, have the necessary infrastructure by 2032.

00:20:08:08 - 00:20:31:08
Michael
So I have a question about this. And this might be this might be a bit of a tangent, but why? Why, why did approvals take so long? Is it to prevent unplanned like unplanned urban sprawl, or is it one of the reasons behind it? I don't really understand. It is it literally just bureaucracy and like all the paperwork that you have to do?

00:20:31:08 - 00:20:39:16
Michael
I don't really get it because I don't think it's to prevent unplanned urban sprawl, because I look at the new suburbs coming up in Sydney and they're just plonked wherever.

00:20:39:19 - 00:20:57:09
Joe
Surprisingly it is, it does have to do with the plans urban sprawl. That is a big thing. They do want to make sure that everything is planned. Everything? Yeah, you know, works, seamlessly with each other. If you go to Oran Park now. Yeah. Oran Park. And I'm just talking about New South Wales, not Brisbane right now, but Oran Park is fantastically planned.

00:20:57:11 - 00:21:06:16
Joe
Things are grids. you know, you've got the town centre and then you've got, the houses built in a way that makes sense.

00:21:06:18 - 00:21:14:14
Michael
Yeah. Is it? It's not like one of those, one of those developments where the houses are like, literally like the roofs are touching next to each other in those new suburbs.

00:21:14:16 - 00:21:35:18
Joe
some parts of it, it's, it's a lot more spread, but the reason is, number one, we've got a lot more applications, okay? We've got a high level of migration. People have started to figure out that there's money in property development and construction in Australia. So they think to themselves, hey, why don't I get into that?

00:21:35:18 - 00:21:56:22
Joe
I want a piece of that pie. So you have a lot more people entering the market believing that they can become developers as well. and then on the back of that, and I am going to smash them right now, I was thinking about being nice, but I'm not. council workers are lazy as all hell. they work from 9:30 a.m. to 4 p.m..

00:21:57:00 - 00:22:12:19
Joe
There is no overtime. There is no, you know, I'm going to stay back and work. It is a ghost town. As soon as I close the office. So, you know, when you've got a report that you've got to finish and it's 7 p.m. and you're like, I've got to smash this out. Otherwise I'm, you know, tomorrow's the deadline.

00:22:12:19 - 00:22:15:11
Joe
I'm going to get in trouble for it. Yeah, yeah. They don't have that. They don't have.

00:22:15:16 - 00:22:15:22
Michael


00:22:16:02 - 00:22:17:01
Joe
Council doesn't have that.

00:22:17:03 - 00:22:19:02
Michael
So so it's basically inefficiencies.

00:22:19:02 - 00:22:42:16
Joe
I want to tell you how inefficient council is okay okay. I have a particular friend and I'm not going to namedrop you but a particular friend that works in council. And they had their wisdom teeth removed. Now six days on average in Australia is ten sick days, ten paid sick days, you know, which is pretty good. He was up today 12 or so.

00:22:42:18 - 00:22:44:12
Joe
Okay. And his manager.

00:22:44:12 - 00:22:45:18
Michael
Having his wisdom teeth taken out.

00:22:45:18 - 00:22:55:13
Joe
Yeah. Yeah. Like it gets better. It gets better. So he turns to his manager and he goes, hey, can I take a few more days off? you know, I've had infections. I've had some issues.

00:22:55:14 - 00:22:56:10
Michael


00:22:56:12 - 00:23:00:21
Joe
And he goes, yeah, of course you could take from the pool. What do you mean, the pool?

00:23:00:21 - 00:23:02:07
Michael
Or they pool their sick days.

00:23:02:07 - 00:23:10:12
Joe
No no no no no. So everybody gets their own individual sick days. Yeah, yeah. And then on top of that there's another pool of sick days that you can take from.

00:23:10:14 - 00:23:11:10
Michael
Interesting.

00:23:11:10 - 00:23:33:01
Joe
So he took another week off, completely paid and was able to, you know, function about his normal day on the other side of that. there are people that are waiting for these applications to get approved so that people can live in dwellings and they're just getting put on the backburner. Yeah. We'll get back to you when we get back to you.

00:23:33:03 - 00:23:34:02
Joe
Is that normal?

00:23:34:04 - 00:23:39:17
Michael
So basically, there's no one cracking the whip. And at the local level there's that.

00:23:39:19 - 00:23:53:07
Joe
You have to remember, it's all a lot of things are politics. So if someone turns around and says, I want 100% net zero, all my busses to be electric. this feasibility that needs to be done on that.

00:23:53:11 - 00:23:54:09
Michael
Yeah, yeah, yeah.

00:23:54:11 - 00:24:14:22
Joe
busses, certain busses, like the electric busses, can only fit 55 people and the regular busses fit 80. Yeah, I'm just using rough numbers. Right. So that means if you used a petrol powered bus, you could have 30% more people on. Okay, fantastic. We're going to move all the busses from this to electric. if somebody stands up and says, but that doesn't make sense.

00:24:14:22 - 00:24:31:03
Joe
Feasibly, this is how much more it's going to cost. This is how much more it's going to cost. And taxpayer money that person in council is going to be told, hey, shut up, we need to get voted in. You want to keep your job, we need to get voted in. Don't even mention it. Just let the election promise run its course.

00:24:31:05 - 00:24:31:17
Joe
So?

00:24:31:17 - 00:24:33:01
Michael
So it's, Yeah, politics.

00:24:33:01 - 00:24:43:15
Joe
There's so much politics involved in getting these applications approved, getting these permits done, and people don't want to lose their job. At the end of the day, people don't want to lose their job. They want to keep their livelihood. It sounds like a pretty cruisy job to me.

00:24:43:17 - 00:24:56:08
Michael
And I guess, and I guess that's why the NIMBYs have so much sway as well. That's exactly right. Yeah, that they don't want to lose their jobs. They're the ones make kicking up a stink. And honestly, not everyone voting in local elections. Is that compulsory in Australia as well?

00:24:56:10 - 00:25:15:22
Joe
I believe it is. Yeah. Okay. So these are genuine things that the local council needs to look at if. Yeah. For everyone that doesn't know, a Nimby is not in my backyard. I have an apartment and I bought it two kilometres down the road from a pub. The pub is too loud at 1 p.m.. 1 a.m. not in my backyard.

00:25:15:22 - 00:25:19:05
Joe
Call up, make a complaint. All of a sudden, the pubs have been shut down. This has happened.

00:25:19:05 - 00:25:24:16
Michael
And this happened a lot. Yeah, and it just happened in a regional town as well. Yeah. Did you see that? To see that.

00:25:24:19 - 00:25:39:24
Joe
I saw that I saw that headline and I'm just sitting at I'm going to myself. This doesn't make sense. But a lot of it is political. And that's why, a lot of these approvals don't get through in time to be able to cope with this mass migration or be able to be able to cope with more supply and housing.

00:25:40:04 - 00:25:56:10
Joe
If we had a high supply in housing, they wouldn't cost so much. You wouldn't need as high the wage, but we don't. The second reason why, not to bore everyone out that but they've changed the approval process because there were a lot of dodgy builders out there. Yeah. So previously I was saying so many people entered the market because they thought, hey, I could do this.

00:25:56:10 - 00:25:57:02
Joe
I can make money.

00:25:57:03 - 00:25:59:11
Michael
Yeah, it's a quick. But it was a get rich quick scheme.

00:25:59:13 - 00:26:06:04
Joe
We saw the Mascot Towers. We saw, you know, what was the other one? The Opal tower. Things were falling apart. Things were falling down.

00:26:06:06 - 00:26:11:01
Michael
And, yeah, the craftsmanship was dodgy. There were cracks. So the buildings were essentially derelict and they were new.

00:26:11:01 - 00:26:21:02
Joe
So they put in all this extra, all these extra steps just to be able to get an approval. And that's what's taking so much longer. And that's why there's so much less supply.

00:26:21:03 - 00:26:23:17
Michael
The dodgy developers. You ruined it for everyone.

00:26:23:19 - 00:26:52:03
Joe
Everyone. next suburb on the list is now Australia's biggest city. They overtook new. That overtook, Sydney recently, which I am personally offended by because, I hate them. Melbourne, Melbourne and Victoria, you now need to be earning $190,000 a year, to be able to afford a home in, in your CBD. And the median house price is $1.16 million.

00:26:52:05 - 00:26:54:02
Joe
This is the only one I understand out of all of them.

00:26:54:02 - 00:26:58:13
Michael
Yeah. Melbourne offers something no one offers more than something. It offers plenty.

00:26:58:18 - 00:27:10:20
Joe
Melbourne's New York, Melbourne has all the big law firms. They've got all the big banks, they've got all the big money, they've got the PR jobs, you've got all the restaurants located in a hub, like a hub.

00:27:10:20 - 00:27:11:20
Michael
That's easily accessible.

00:27:11:20 - 00:27:14:18
Joe
Easily accessible. They've got the tram lines, they've got, they've.

00:27:14:19 - 00:27:15:21
Michael
Coming from the airport, they've.

00:27:15:21 - 00:27:32:15
Joe
Got it worked out, but they do. They've got it worked out. Yep. I even like the airport because it's out of the city. Because it's out of the city. You land in the airport and guess what? You can land at 3 a.m. as opposed to Sydney where we our airport landing times cut off 11:00 am.

00:27:32:17 - 00:27:33:09
Michael
something like that.

00:27:33:09 - 00:27:37:13
Joe
Because of noise. Because of. Not in my backyard. Like it just it's just stupid.

00:27:37:13 - 00:27:38:18
Michael
Sydney's a nanny state.

00:27:38:20 - 00:27:50:16
Joe
Is an absolute nanny state. But I understand why Melbourne is so expensive. But yet again, the whether they were shit. So let's move on from there. this is the one that caught both of us by surprise.

00:27:50:16 - 00:28:02:03
Michael
I'm genuinely shocked. You want to go camera $205,000 you need to earn to financially like live stress free and buy a house. I can't believe it.

00:28:02:03 - 00:28:12:15
Joe
Canberra $205,000 is how much you need to be making. Now, I do understand where that salary comes from. A lot of the politicians make that sort of money.

00:28:12:19 - 00:28:15:24
Michael
Oh yeah, comfortably. Do like it's like 300,000 I think. Is that right?

00:28:15:24 - 00:28:18:03
Joe
And you have no idea how much they comp like.

00:28:18:03 - 00:28:22:21
Michael
Oh yeah. Yeah. And with the lobbyists and stuff like that from and this is on both sides of the aisle, it doesn't matter.

00:28:22:22 - 00:28:42:10
Joe
No, no it doesn't matter. Like we saw the other day, Adam Bandt bloody flying around on a private jet and charging Australian taxpayers $1 million. Let's go ahead. Net zero greenies. But anyways so $205,000 to be able to afford a property of $950,000. So I'm not too sure if the median house prices are correct on this one.

00:28:42:15 - 00:28:48:00
Michael
Yeah, or I'm not really sure where this number came from because it did shock us. I would have put it around the middle of the list.

00:28:48:03 - 00:28:59:05
Joe
But I do understand why it's so expensive to live there, because all the politicians need to live there and they're just baiting each other out. Hey, I want that house. No, I want that house. And they trying to stack on top of each other.

00:28:59:10 - 00:29:05:00
Michael
And they're also not like permanent dwellings for them as well. Yeah. Because once they if they're not in office anymore, what the fuck you can live in Canberra for.

00:29:05:01 - 00:29:22:19
Joe
That's exactly right. So they're developments a lot slower. But one thing I do want to note about Canberra, if you are considering living in Canberra because there is an opportunity for employment or there is an opportunity for a job, you do have to start looking at the regional suburbs around it. Yeah, regional cities. Goldman is a fantastic option.

00:29:22:24 - 00:29:32:02
Joe
You can be 35 minutes, 40 minutes away from Canberra CBD, living in Goulburn, but your house prices are half what they are in Canberra and.

00:29:32:02 - 00:29:32:23
Michael
You've got the big Ram.

00:29:32:23 - 00:29:56:15
Joe
So yeah, that's true. But if if your life is just about work, go home. Herman Goulburn is a fantastic option to be looking at. we've got the Mac daddy, we've got the most expensive city in Australia to discuss now. Oh, yeah. And I've got, I've got ten minutes on this one. I'm ready to hammer it.

00:29:56:17 - 00:29:59:18
Michael
We're allowed to. It's our home.

00:29:59:20 - 00:30:03:05
Joe
So the median house price in Sydney is now $1.6 million.

00:30:03:07 - 00:30:07:11
Michael
Which was up. It was only 1.3, I want to say just like a month or two ago.

00:30:07:17 - 00:30:13:04
Joe
So it was back in December. It was $1.3 million. Like that was the average.

00:30:13:05 - 00:30:14:07
Michael
Yeah.

00:30:14:09 - 00:30:29:15
Joe
To afford a home in Sydney on your own in order to be able to make repayments, live comfortably and just relax. Michael. Oh. Oh. Do you want me to say it? No, no.

00:30:29:17 - 00:30:41:23
Michael
I've got it. I'll take the boy. $293,578 a year to live, to buy a property and live comfortably without financial stress in Sydney.

00:30:42:00 - 00:31:06:11
Joe
This is the most insane number I've ever heard. If, like, I actually cannot believe that that is the income you need as a sole person to be able to afford just the median house in Sydney, the median, the midpoint. I'm not talking about Vaucluse. I'm not talking about Point Piper. I'm not talking about Bellevue Hill. I am talking about not even five doc.

00:31:06:12 - 00:31:25:21
Joe
Five doc is double that price, $1.6 million. Now I'm talking about, you know, many. I'm talking about Illawarra. I'm talking about Alford's point. I'm talking about Padstow Revesby. I'm talking about like suburbs that are east of Bankstown. Yeah. Just for affordability, the median house price in Punchbowl is like $1.4 million.

00:31:25:24 - 00:31:29:11
Michael
Punchbowl man. Yeah.

00:31:29:13 - 00:31:51:06
Joe
Guilford is $1 million to be able to afford. Parramatta is over the million dollar mark. Close to the $2 million mark. Yeah, it is insane how much money you now need to be earning to just afford a house in Sydney at $294,000. So Sydney is the home of the self-employed Sydney is the place where, if you want to afford a home.

00:31:51:06 - 00:32:08:18
Joe
I'm not talking about an apartment, I'm just talking about a home. These are the four jobs, okay? I'm talking about. You are paid an hourly wage and this is how much you earn. These are the four jobs you need to be gunning for in order to afford a home in Sydney.

00:32:08:18 - 00:32:12:10
Michael
And. And it is only four jobs. Literally.

00:32:12:12 - 00:32:16:07
Joe
The one that was one down was $275,000 a year salary.

00:32:16:09 - 00:32:19:17
Michael
And it's just not enough, apparently.

00:32:19:19 - 00:32:38:05
Joe
number one you are, doctor. You earn $305,000 a year. I want to note that I have a lot of doctor friends that are clients of mine, and a lot of them do not earn $305,000 a year. So that is a doctor and you are a specialist at the same time, not just the GP.

00:32:38:07 - 00:32:39:07
Michael
Can’t be GP.

00:32:39:13 - 00:32:42:16
Joe
You are $305,000 a year. Yeah.

00:32:42:18 - 00:32:44:04
Michael
PhD ain't going to cut it in Sydney.

00:32:44:04 - 00:32:58:10
Joe
It's not. The next on my list is an anaesthesiologist. How many anaesthesiologists do you know? $386,000 and 60 $386,000 annual salary?

00:32:58:12 - 00:32:59:01
Michael


00:32:59:01 - 00:33:11:21
Joe
That's job number two. Job number three is a surgeon. These are the people that cut you up and fix you at $394,000. And the last one is my absolute favorite.

00:33:11:23 - 00:33:13:10
Michael
Yeah, I don't know what this all means.

00:33:13:12 - 00:33:15:04
Joe
A judge.

00:33:15:06 - 00:33:17:10
Michael
Because I thought you were going to say finance dealer.

00:33:17:13 - 00:33:17:22
Joe
No, no.

00:33:17:22 - 00:33:19:03
Michael
No, no. We'll get to.

00:33:19:03 - 00:33:35:15
Joe
Finance Dealer in a second. But a judge who earns $395,000 a year, those are the four jobs that you now need to be applying for, that you now need to be gunning for. If you want to purchase a house in Sydney and live comfortably at the same time.

00:33:35:17 - 00:33:38:14
Michael
That's being able to do whatever the hell you want to do with all your needs in one.

00:33:38:14 - 00:33:41:19
Joe
No no no no no no, that's not whatever the hell you want to do. I don't know what that's like.

00:33:41:24 - 00:33:45:15
Michael
You're only spending 30% of your income on, your mortgage repayment.

00:33:45:15 - 00:34:10:22
Joe
That is your you're spending your money on your mortgage repayments. You don't have a credit card, you don't have any cars on finance. You don't have, hex that. You don't have any of that. That is how much you now need to now need to be able to afford a home in Greater Sydney. And I just look at these statistics and look at these four jobs, number one than 98% dominated by males.

00:34:10:24 - 00:34:11:17
Michael
Yeah.

00:34:11:19 - 00:34:19:06
Joe
Number two, a lot of these jobs who you know, not what you know, especially a judge.

00:34:19:08 - 00:34:24:05
Michael
Yeah, yeah. And I don't speak for the legal system myself.

00:34:24:07 - 00:34:32:17
Joe
legal systems definitely. Who, you know, and, Yeah. And then number three, you need ten years of medical experience just to be able to qualify.

00:34:32:18 - 00:34:35:14
Michael
That's not including all the study you have to do before that as well. No.

00:34:35:14 - 00:34:43:04
Joe
And I just like I just look at these statistics and, we're not making these up. This this this report was done by the University of Monaco.

00:34:43:04 - 00:34:59:12
Michael
Like so. Yeah, I found the I realize I did make notes about who made this. Yeah. Who who got this report? It's the parliamentary library. It was commissioned by the Greens. The Greens didn't do it. They just ask someone to do it. So don't get political about it now.

00:34:59:13 - 00:35:01:17
Joe
Gets a little bit.

00:35:01:19 - 00:35:04:08
Michael
so yeah, that's where it came from. So parliamentary library.

00:35:04:10 - 00:35:09:24
Joe
So I just look at these statistics and I go to myself. How many, how many surgeons do I know? none.

00:35:10:02 - 00:35:11:12
Michael
I don't yeah, I don't know how many.

00:35:11:12 - 00:35:31:18
Joe
Anaesthesiologists do I know. None how many medical professionals do I know? Three or maybe that are friends? And then how many judges do I know? Absolutely none. So I sit there and I go to myself, Who's Sydney for now? Yeah. And we need to fix something. We need to fix something about the housing affordability. We need to fix something about the supply and demand.

00:35:31:20 - 00:35:38:06
Joe
Because it's not fair. We have a population of over 7 million people in New South Wales alone. I don't.

00:35:38:06 - 00:35:42:08
Michael
Actually know whether it's something where we're at 27 mil nationwide.

00:35:42:08 - 00:36:08:11
Joe
And we have another 500,000 people coming to Australia this year, which is going to be higher than that, mind you, because we had 100,000 in February alone. Episode two. and then on top of that, we're proving to 10,000 dwellings a month. We can't keep up. So this podcast was basically about housing affordability and what you need to be doing in order to be able to afford a home in Sydney.

00:36:08:13 - 00:36:25:09
Joe
And here's my best advice. Number one don't have any debt. Number two, marry someone and so you can have a combined income to be able to purchase a property. And number three on the study hard or own your own business. Because unless you own your own business, you're not going to be able to afford a home in Sydney.

00:36:25:11 - 00:36:32:06
Joe
And unless you really type A your expectations, you're not going to be able to find something.

00:36:32:07 - 00:36:35:03
Michael
And number four, have parents that already own land.

00:36:35:05 - 00:36:36:14
Joe
That's a very important thing as well.

00:36:36:19 - 00:36:55:24
Michael
Because really, the big thing right now, people in my generation of how they buying properties, all of them have I mean even myself like I it was literally an entire family effort, like all 3 or 3 of us, my siblings and I, which we still don't make up that $293,000 a year with three of us. All of us had to get involved for to make it happen.

00:36:55:24 - 00:36:56:15
Joe


00:36:56:15 - 00:36:58:08
Michael
Is. If you don't have access to that, what do you do?

00:36:58:08 - 00:37:19:09
Joe
It is genuinely insane that these are the numbers. Now to be able to afford a home in Sydney. I want to use Michael as a case study because I think this is a perfect example. So can we use you as a case study? Yeah, go for it. Michael purchased a property in Quakers Hill along with his two siblings and their combined income together.

00:37:19:11 - 00:37:31:09
Joe
in order to be able to purchase this property, I think your loan was for about $1 million, something like, roughly like. And they didn't buy in Sydney. They bought in Quakers Hill, which is how far out of Sydney's CBD.

00:37:31:11 - 00:37:38:10
Michael
So, and don't make me think about it. 60 minutes. Yeah, I was with no traffic. It's probably like a 45 minute drive. Okay.

00:37:38:13 - 00:37:40:04
Joe
With no traffic, a 45 minute drive.

00:37:40:04 - 00:37:41:11
Michael
There's there's always traffic.

00:37:41:16 - 00:37:59:23
Joe
And there's always traffic. But just to be able to afford a home in Sydney, he and his two other siblings needed to combine that income. And guess what? When we initially submitted their loan, okay, Saint George came back to us with nine questions to try and say these people shouldn't buy this property. And I'm like, are you insane?

00:38:00:00 - 00:38:21:05
Joe
Combined income, everything together. Not only should they can they afford the property, they can afford it with this much extra on top. And this is the problem with the system in Australia. This is the major issue that we have. The banking system, still assesses your loan, that interest rates are going to rise by another 3%. Oh yeah.

00:38:21:05 - 00:38:25:16
Joe
So your interest rate right now is about 6.29 I think, or 6.19. We got you.

00:38:25:16 - 00:38:26:22
Michael
At I think it was 6.19.

00:38:26:22 - 00:38:27:22
Joe
Yeah okay. Fantastic.

00:38:27:24 - 00:38:29:08
Michael
I think it's 6.08.

00:38:29:10 - 00:38:56:12
Joe
Fantastic rate for Michael and his family. Just going to put that one out there. but even with that, even with his super low interest rate and everything, the Saint George Bank still assesses his loan at 9.08%. And you match that with these super high property prices, who can afford a home in Sydney? And we highlighted it a surgeon, an anaesthesiologist, a medical professional and a judge.

00:38:56:14 - 00:39:03:09
Michael
So I guess I guess your parents were I get me a doctor or a lawyer, otherwise you're screwed. Even lawyers.

00:39:03:09 - 00:39:12:20
Joe
Are screwed. I want to thank you all for paying attention to the this episode of the finance show. Joe. As always, my name is Joe. That's some schmo.

00:39:12:22 - 00:39:17:02
Michael
I like the idea that I'll never be named in these episodes, even though I've been named many times.

00:39:17:07 - 00:39:19:09
Joe
And we will catch you on the next one.