Time to sell up and move to Bali?
While we keep a keen eye on local property prices, mapping our performance against prices world-wide provides insight into trends and opportunities. For example, perhaps it really is time to sell in Melbourne and buy in Bali : – ).
Recently, a series of reports shone a light on the very topical subject of housing affordability and city by city livability.
Looking at the first hot button of affordability, international housing affordability think tank, Demographia, recently released its 13th survey on house prices around the world, analysing prices from the third quarter of 2016.
The survey compared average home prices to median income, taking in 94 major cities and 406 areas in total. Demographia listed Sydney as the second most unaffordable city, but also listed Toowoomba as less affordable than New York . . .mmm, really?
Bali (which we know is very well priced) was unfortunately left off the list as the study was limited to the United States, United Kingdom, New Zealand, Australia, Canada, China (Hong Kong), Ireland, Japan, and Singapore.
Among the 94 severely unaffordable markets, 33 are in Australia, according to the report. It found that Sydney’s housing is 12.2 times the median income and Melbourne’s is 9.5 times the median income. Adelaide, Brisbane, and Perth were also ranked “severely unaffordable,” coming in at 6.6, 6.2, and 6.1 times the median income respectively.
The following graph from Demographia tracks the change in affordability rates across Australia. Note though, it is still a comparison of median prices to ‘middle’ income and does not take into account the change in interest rates over time.
While it makes for great headlines, the Demographia report assumes everyone is buying at the median, which followers of Crave know is not a reflection of market reality.
In another attempt to compare and contrast the global housing market, Knight Frank released their ‘what will $1M get you report’. This revealed Sydney as the seventh most expensive place to purchase a property, with $1,000,000 buying around 41.2 square metres. The ‘most expensive’ city according to Knight Frank is Monaco, where $1,000,000 will buy you a tiny 15 square metres. The graph below shows the other top 10 contenders.
The cost to move to a new city is another trend line to monitor. Online moving platform Movinga has conducted research into the costs associated with relocating to some of the world’s most in demand cities.
The research across 75 cities in 51 countries found that Luanda in mineral-rich Angola has the highest first month’s basic costs, ahead of New York and San Francisco. Tunis in Tunisia has the lowest.
In most surveys, Hong Kong, New York, Singapore and London usually battle it out for the title of most expensive city to live in. However, the Movinga research adds in the cost of the move itself and ranks each city by the total costs for the first month.
The calculation includes the average rent for a 35 square metre apartment close to each city centre, a mobile phone, food and drink and public transport. Sydney ranks seventh with a first month living cost of $2,876 ($US2163.43). Sydney also ranks 61st for average relocation costs. See the table below for the top 10 most expensive (in US dollars), according to the Movinga research.
Our final review of world-wide trends incorporates the work of Travel Agency, The Crazy Tourist. The agency used statistical data from Numbeo – a site that monitors world living trends – to create the following infographic of the 20 most expensive cities to live in. Sydney is still up there, but floating down to the tenth most expensive cities.
If you have made it all the way to the bottom of this blog, you may like to make your own enquiries about Bali as an option for your next purchase. While not covered on the global reports outlined above, the cost to purchase a four bedroom luxury villa with 7 bedrooms, 7 bathrooms and 8 car spaces is $3,100,000 in Indonesian Rupiah = $302 Australian dollars. A shame I am not a fan of extremely hot weather : – ). But don’t let me stop you from thinking about this option. More and more Australians are moving to live in places like Bali. Let the eternal summer holiday begin . . .
Buy smarter = limitless ways to build lifetime income
Crave Property Advisory is a unique property strategy and buyers agent service. As the only independent and unbiased advisory that can help you use any property strategy Australia-wide, Crave’s services extend to home, investment and commercial property. A highly client focused organization, Crave developed the Modular Investing System (MI System) to provide clients with the ability to use a tailored mix of strategies and efficiently build profitable portfolios that create lifetime income.
Debra Beck-Mewing is the CEO of Crave Property Advisory, and has more than 20 years’ experience in property investing, Australia-wide. She has used a range of strategies to build her property portfolio including renovating, granny flats, sub-division and development. Debra is skilled in identifying development opportunities, and sourcing properties that have multiple uses and multiple exit strategies. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business.
Disclaimer – This information is of a general nature only and does not constitute professional advice. We strongly recommend you seek your own professional advice in relation to your particular circumstances.