A new report has revealed that those wanting to buy a home on the South Coast may have to save for almost 15 years to do so.
The recently released Affordable Housing Income Gap Report by social housing provider Compass Housing, has found that housing affordability is deteriorating.
According to the report, one of the simplest ways to work out the deterioration in affordability is through a measurement called the Median Multiple.
To calculate this, the median house price for a particular suburb is divided by the median gross household income for that area.
The resulting number represents the number of years’ worth of income required to purchase a home.
“For most of the 20th century, Australia’s median multiple was between three and four,” the report read.
“That means the average Australian house could be purchased for approximately three to four times the average household income. Australia’s median multiple has now blown out to more than eight.”
But on the South Coast, that number is much higher than eight.
According to the 2016 Census statistics, the average weekly household income in Nowra was $808 per week or $42,016 per year.
According to Domain, the median price for a two bedroom home in Nowra is $430,000.
This means that more than 10 years worth of income is needed for the average Nowra civilian to buy a home.
It’s a similar story in Ulladulla too.
The average household income is $813 per week according to the census, or $42,276 per year.
The median price for a three bedroom home is $525,000, which means an Ulladulla resident looking to buy would have to fork out 12.4 years worth of income for a home.
While the average weekly household income is significantly higher in Kiama, $1306, the median house prices are also a lot more expensive.
The average price for a three bedroom home in Kiama is $840,000, which means those residents who wish to buy a home in the suburb, will need 12.4 times their average yearly income.
The Shoalhaven’s boutique suburb of Berry is one of the most expensive in the region, with homes costing in excess of 14 times the average household income.
The median price for a three bedroom home in the sough-after, boutique suburb is $950,000, according to Domain, which is 14.6 times the suburb’s average household income of $65,104 per year.
Compass Housing’s report stated that it was “generally accepted as fait accompli that home ownership is beyond the reach of average income earners and a significant proportion of the population has all but given up on the ‘Australian Dream’.”
To make prices more affordable for buyers, the report states that median prices “would need to fall by 60 per cent” or median income would need to rise “by more than 200 per cent.”