Australian House Prices High On The World Scale

AUSTRALIAN home loans became more affordable in all states except the ACT in the September quarter last year, according to the latest report by the Real Estate Institute of Australia.

In Victoria, the average monthly loan repayments dropped $56 from the previous quarter to $856. At the same time, the median family income increased $128 to $36,785. This means the proportion of median family income that paid off a home loan decreased almost two points to 27.9 per cent.

The national home loan affordability ratio _ of monthly loan repayments to the median household income _ dropped about three points to 29.3 per cent.

Lower interest rates and smaller average loans had helped improve the average Australian's ability to buy a home, said the REIA.

However, an international property survey by `The Los Angeles Times', shows that Australia's residential real estate prices are among the highest in the world.

The improvement in the average Victorian's ability to afford a home was a highlight of 1991, according to REIV president, Mr Bill Heath.

``The accelerated growth during the boom years was always taking away from average Australians the potential to own their own homes. What 1991 has done is made homes more affordable," he said.

New South Wales recorded the worst affordability despite lower average loan repayments and higher wages. Average monthly loan repayments fell $171 in the quarter to September to $1040 and the median yearly family income improved $128 to $36,785.

The proportion of median family income used to pay off a home loan was about 35 per cent in NSW _ 6.4 points lower than recorded in the June quarter.

The Northern Territory recorded the best affordability in Australia with just 17 per cent of the median family income paying off the average home loan.

The highest average monthly loan instalments were in the ACT, increasing by $49 to $1022 to the September quarter. However, there the median family wage got a $456 boost to $55,477, making homes in the ACT the second most affordable in Australia.

ARGENTINA Cost: $40,000 to $130,000, depending on the neighborhood.

Size: 2-3 bedrooms, living and dining rooms, garage, 97 sqm, age of house from 20-50 years.

Financing: Due to high inflation, the only mortgages available are at interest rates of 24-30 per cent with repayment in two to five years. Home loans are now rare.

Income: $9000-$20,000.

Family size: Husband, wife, two children and one grandparent. Fifty per cent of the wives work.

Special characteristics: There are no restrictions on building, buying or renovating except the economic ones. About 50 per cent of families own their homes.

BRITAIN Cost: Varies according to size and location for a three-bedroom, semi-detached home: $163,000-$305,000 in Greater London, $44,000-$109,000 in the Midlands (Nottingham), $65,000-$164,000 in the North West (Liverpool) and $70,000-$185,000 in Scotland.

Size: Most are 2-3 bedroom, detached or semi-detached houses. Most are no larger than 90sqm. They have living and dining rooms and a garage.

Financing: Homes are seldom purchased with bank loans but are usually bought through building societies. Typical home loans are for 25 years at 15.5 per cent.

Income: Average gross yearly income of homeowners with mortgages is $24,596. Homeowners with mortgages have the highest average of any group in Britain. The typical household is still supported by one income, but there is a swing to two incomes.

Family size: 1987 statistics showed an average of 2.55 members, with the number of households with only one person increasing from 17 per cent in 1971 to 25 per cent in 1987. Of the total population, 44 per cent is made up of families with dependent children. The average number of children in households with children was 1.8.

Special characteristics: There is a waiting list for public rented housing and low-cost first-time buyer property.

CANADA Cost: Varies from $180,000 in Toronto to $265,000 in Vancouver.

Size: 3 bedrooms, living, dining, family rooms plus garage; about 180 sq m.

Financing: Mortgage from bank, trust company or credit union with 25-year amortisation and an interest rate of 15 per cent renegotiated no longer than every five years (usually every 2-3 years). Deposits are usually 10-25 per cent. Property taxes average $2600 annually.

Income: $54,000. More than half of the households have two salaries.

Family size: In Vancouver a husband, wife, two children. In Toronto 3.1 persons to a household, with children in 40 per cent of the households.

Special characteristics: Housing prices in Vancouver have escalated rapidly in the past two years to the point where there is an ``affordability crisis". There has also been a significant move in the city toward condominium-type living.

FRANCE Cost: In what is described as ``an executive neighborhood" in Paris, $740,000 for 96sqm with two bedrooms, living and dining rooms, garage and a kitchen. In the Paris suburbs it is about $690,000 for 154sqm with four bedrooms, living, dining and family rooms and a garage.

For all of France, the average is $225,000 for about 48sqm with one bedroom and a living room.

Financing: Mostly with bank loans for 15-20 years at 10 per cent interest with 10 per cent deposit.

Income: Throughout France the average annually is $22,500, though the average for executives is $130,000. Most families live on two incomes.

Family size: Husband, wife, two children.

Special characteristics: Waiting list for housing at a good price in Paris.

ITALY Cost: Varies according to city and location, whether it is in a downtown area, a residential neighborhood or a historical location. As an example, a house of 116sqm can range in price from $79,000 to as much as $556,000 if it is in a historical area.

Size: 121sqm with two bedrooms, two bathrooms, living and dining rooms and a garage.

Financing: Bank loans at 14-15 per cent interest; loans from credit unions at 11 per cent. Loans vary from 10-20 years.

Special characteristics: Average period of ownership is more than 40 years. The attitude is to live and work in one's native town. Nearly 65 per cent of Italians have owned their homes for many years.

JAPAN Cost: The average metropolitan Tokyo condominium with three bedrooms, kitchen, dining and living rooms sold in 1989 for about $588,000.

Size: Most recent figures indicate that the average floor space per dwelling in Tokyo is about 87sqm, with 4.87 rooms per dwelling. However, rooms that are below ground level and common areas are included in size averages.

Financing: The newest thing in Japan is the 100-year mortgage, so that the burden of paying for a home can be passed from generation to generation, making housing more affordable to families. Interest rates are 7.5 per cent for 20-year or 30-year mortgages.

Income: $56,300, mostly from husband's wages but also from earnings of wife, other household members, side businesses and bonuses.

Family size: 3.21 persons per household.

Special characteristics: About 61 per cent of the Japanese families own their own home. A survey showed that a number of Japanese prefer independent homes to condominiums. Given the alternatives, 53.7 per cent chose a house requiring long hours of commuting, and 35.1 per cent preferred an apartment or condominium close to the city.

MEXICO Cost: Some two-income families can buy homes for about $40,000, with government assistance, and pay for it in five years. Prices jump to $99,000 and more for the upper middle-class, which represents a small portion of the population.

In the two or three expensive neighborhoods of Mexico City, prices range from $265,000 to $1.3million. Rents there can be as high as $4630 a month. An average one-bedroom condominium would cost about $1600 a month.

Size: Homes at $99,000 and more average 232sqm, including three bedrooms, living, dining and family rooms and a garage.

Financing: Mostly bank loans with 10-year and 15-year mortgages, interest rate 15 percentage points above prime rate and deposits ranging from 20 to 40 per cent.

Income: Per capita, about $9300.

Family size: Husband, wife, three children.

Special characteristics: There are three classes: working, poor, and upper middle-class and above. Unless housing is inherited or government-sponsored, most people cannot afford to buy a home.

NETHERLANDS Cost: The average is $132,000, but most houses are from $62,000 to $105,000. Monthly rents vary from $170 to $1320, excluding utilities.

Size: Most houses have five rooms. A separate dining room is found only in older homes. About 10 per cent of houses or flats have a garage. Detached houses are usually about 225sqm; two-room apartments are 90sqm; four-room apartments are 140sqm.

Financing: Mortgages are usually made by general banks and mortgage banks for a term of 25 years with the interest rate, now at about nine per cent, renewed every five years.

Income: The median income of the population is $29,000. Middle-income, management-level families earn up to three times this amount. Most families have two incomes.

Family size: A household has an average of 1.8 children.

Special characteristics: There are waiting lists for rental houses in the bigger cities. The average age of most houses is 35 years.

SOVIET UNION (before dissolution) Cost: Private property ownership is expanding, but most people continue to rent their homes at subsidised monthly rates ranging from about $13 to $44.

Size: The average home, a co-op apartment either rented or owned, is 36sqm and includes a living room, which is also the bedroom.

Financing: In February 1988, a government decree encouraged construction of new housing for Soviets and allowed citizens to take out bank loans for up to about $44,000 to build homes. In rural areas, the loans were to have a 50-year payback; in the cities the loans had to be repaid within 25 years. Borrowing rates were 1-3 per cent a year.

Even so, most of the housing is still owned by the state, and the rest belongs mainly to housing co-ops and co-operative enterprises.

Income: About $440 a month.

Family size: An average household includes one child and a grandmother.

Special characteristics: One in five families lives in what is referred to as collective housing, which can be anything from a bunk in a collective farm barracks to a couple of rooms in an urban apartment shared with another family. There is a waiting list of about 10 years even for rental housing.

SWEDEN Cost: About $93,000.

Size: A typical single-family home built with government assistance is 112sqm. An average flat is 61sqm. Nearly half of the Swedish households own their own houses or one-dwelling buildings. About 15 per cent of the households own their own flats in multi-dwelling buildings.

Financing: A typical mortgage runs for 30-40 years, either with a fixed interest rate, which is changed every fifth year, or a non-fixed interest rate. The fixed rate is about 15.5 per cent, and the non-fixed rate about 16.5 per cent.

It is usually possible to borrow up to 85 per cent of the market value of the house on these terms. The last 15 per cent can be financed with a so-called ``top loan", with a slightly higher interest rate. The average household makes a deposit of 10-30 per cent.

Income: Ninety per cent of the working population works full time or more, and has an average annual income of $33,600. The typical household in a one-dwelling house has two incomes.

Family size: Most recent statistics, from 1985, show an average number of members in a household as 2.2, with the average family having 1.9 children.

Special characteristics: In the biggest cities, Stockholm and Gotenborg, there are waiting lists of up to 20 years for flats to rent. Sites for houses are also hard to get in the major cities. Almost every house is built with government assistance.

TURKEY Cost: Prices range from $90,000 to $120,000 for a typical home.

Size: 100sqm, generally with three bedrooms, a kitchen and bathroom. Most are flats.

Financing: Housing loans, a new phenomenon in Turkey, can be obtained from the Mass Housing and Public Partnership Directorate, which is a public institution, or from certain banks. Loans are given according to limits based on house size. The amount of a loan covers up to 25 per cent of the market price. The mortgage interest rate is about seven per cent.

In many cases loans are obtained from the construction company. The builder starts collecting instalments for the house while it is under construction. After the payment of 60-70 per cent of the total, the flat is transferred to the buyer. The balance is collected in various instalments for up to three years.

Special characteristics: Families typically can buy a house through the government in the seventh or eighth year of marriage.