Owning a Place to Live - Let's Compare Affordability Across Countries

[VetLegion]

From another thread, where it was off-topic:

Originally posted by OneFootInTheGrave The historical average for market prices is about 4x the average salary. Before 1990 crash it peaked about 5x, now it is 6x the average... well perhaps some migh hope we have landed in another "era" where this higher price/salary difference is "normal" but as long as we stay in free market economy my bet is that we will see a correction.

If I understand correctly, 4x the average yearly salary is the price of average sold apartment? But those vary in size. It would be more useful to know price per square meter (or foot) compared to average salary.

In Zagreb, a new flat is 1600 EUR/sq meter if it is in a lousy neighbourhood, which comes out 128 000 EUR for 80 square meters. Given that the average yearly salary (12x average monthly s.) is in the 7800 EUR range, an 80 sq. m. flat (decent-size IMHO) flat costs 16x the average yearly salary.

Why anyone would think UK prices are unsustainable is beyond me

Anyway, as we have an international crowd here, how about we compare relative affordability of housing across countries?

Please post at least:
- how many average yearly salaries does an 80 sq. m. apartment cost in your neck of woods

...and anything else that you think relevant to this comparison. Thanks!

[Dauphin]

A 60 sq m flat near where I live is for sale for £240,000 (an the equivalent of €340,000). Mean household income for the ward is £38,000 (or €54,000). So 6x times average household income, give or take.

[Dauphin]

There is another property for sale at £4,250,000 about a mile away.

http://www.rightmove.co.uk/viewdetails-15952997.rsp?pa_n=1&tr_t=buy

FEATURES

* 5 bedrooms
* 5 recs, gym, study area
* 4 bathrooms
* Garage and carraige driveway
* Gardens and Tennis court

[VetLegion]

Wait, household income is what two people earn? So 6x household income would be 12x income of one person? That's exactly the same as in Croatia for that apartment size!

It's quite interesting, I think. We have vastly different incomes in absolute numbers, but affordability (prices relative to earnings) seems to be in the same ballpark.

[DanS]

Downtown DC. Central.

Mean adjusted gross income (2005)* = $63,589

Current RE market (2007)
Studio (40 m^2 or 400 sq. feet) condo used (no parking) = $200k, or about $5,000 per square meter
1 BR condo (70 m^2 or 700 sq. feet) condo used (no parking) = $300k, or about $4,300 per square meter

So that's 4 or 5 times average adjusted gross income, give or take.

*A composite of household and individual income, since married couples can file income taxes either jointly as a household or individually. Adjusted gross income is all income minus certain items.

Please note that this is a very atypical area for the US -- as urban as any Euro neighborhood. About half of the US has dirt cheap real estate and is more suburban/exurban/rural. 90% of the US you couldn't get by without a car. But you can do fine here without a car.

[DanS]

By way of comparison, my hometown in Ohio, near Columbus. Exurban/rural, but within about 1/2 to 1 hour commuting distance of downtown Columbus.

Mean adjusted gross income (2004) = $36,768
Ranch-style House (250 m^2 or 2500 feet^2, plus about an acre or 0.4 hectares of land), 2 or 3 car garage = $175k, or about $700 per square meter of house
Car required, riding lawn mower required

Most unacquainted Euros will be astounded by how much house many Americans & Canadians have. Frankly, most have no Earthly conception, Kuci's bathrooms notwithstanding. I'm guessing that the Aussies and Auklanders are similar to the Northern Americans.

A childhood friend recently bought 2 acres (0.8 hectares) plus built a new 4,000 square foot (400 m^2) house for about $300,000 total. A real palace, IMO. Planning on 6 children. Comparing circumstances among all my childhood friends during the holidays is really interesting.

[Dinner]

Re: Owning a Place to Live - Let's Compare Affordability Across Countries

Originally posted by VetLegion
If I understand correctly, 4x the average yearly salary is the price of average sold apartment? But those vary in size. It would be more useful to know price per square meter (or foot) compared to average salary.

In Zagreb, a new flat is 1600 EUR/sq meter if it is in a lousy neighbourhood, which comes out 128 000 EUR for 80 square meters. Given that the average yearly salary (12x average monthly s.) is in the 7800 EUR range, an 80 sq. m. flat (decent-size IMHO) flat costs 16x the average yearly salary.

Croatia is a bit of an anomaly though. Much of the run up in the last 5 years hasn't been due to domestic demand but due foreigners realizing Croatia was a really beautiful place with a great climate close to the rest of Europe and thus rushing in to buy vacation homes.

Once Croatia gets in the EU we can expect even more price jumps. Supposedly the Bulgarian coast is currently undergoing such EU entry price increases. Personally, I'd much prefer the Dalmatian coast to Bulgaria any day. Good wine, hot women, excellent weather, and close to Italy & Austria.

[Dinner]

Just to add numbers so we can continue the mission stated in the OP. In my parent's neighborhood, Scripps Ranch in San Diego, you can buy a newish track home on a very small lot (0.08 acres) 3/2.5 1750 sq ft for $650,000 which is ~$371.41 per sq ft or you could buy a lake view custom designed home with 4 bed/3.5 bath and 3660 sq ft for $1,650,000. That comes to be about $450.82 per sq ft.

Housing prices are down by a significant amount right now too so many people in the nicest homes simply aren't selling and are waiting for things to improve. My parents house is an older track home built before land prices went through the roof so their 0.33 acre lot bordering a wooded open space preserve would likely command a premium simply due to the lot size. In fact up until last year we were seeing people buying 70's and early 80'd vintage homes just to get the lots and then tearing down the 25-35 year old house in order to build a new McMansion. Kind of sad but I guess that's what the market is demanding.

[DanS]

Even though Croatia might be an anomaly, VetLegion has to contend with these prices. Likewise, you have to contend with the fvcked up San Diego real estate market and dolphin has to contend with the fvcked up London real estate market.

[Barnabas]

Info for Buenos Aires


An apartment with 2 bedrooms in a high class neighbourhood

from 80 to 130 thousand dollars

An apartment with 2 bedrooms in a middle class neighbourhood

from 60 to 95 thousand dollars

An apartment with 2 bedrooms in a working class or even poor neighbourhood

from 35 to 60 thousand dollars

[Dinner]

Oh, and the median household income in San Diego in 2005 was $59,775. That means the average single family home is ~10-11 times yearly earnings.

[VetLegion]

Originally posted by Barnabas
Info for Buenos Aires


An apartment with 2 bedrooms in a high class neighbourhood

from 80 to 130 thousand dollars

An apartment with 2 bedrooms in a middle class neighbourhood

from 60 to 95 thousand dollars

An apartment with 2 bedrooms in a working class or even poor neighbourhood

from 35 to 60 thousand dollars

Please provide average yearly earnings, we can't compare otherwise.

[Pekka]

In here, average yearly income, ~30k. Average house, 200k. So about x 7. Add mega huge taxes and you won't be owning a house any time soon anyway. You're screwed.

[Japher]

Originally posted by DanS
By way of comparison, my hometown in Ohio, near Columbus. Exurban/rural, but within about 1/2 to 1 hour commuting distance of downtown Columbus.

Mean adjusted gross income (2004) = $36,768
Ranch-style House (250 m^2 or 2500 feet^2, plus about an acre or 0.4 hectares of land), 2 or 3 car garage = $175k, or about $700 per square meter of house
Car required, riding lawn mower required

I work about an hour south of Columbus and that's what it is here, same for around Cincinnati, where I am. I really like here, for the price. The culture, or lack there of, takes some getting use to. Still, the Midwest hospitality is pleasing. Especially comapred to the "don't talk to me you worthless scum" attitude of Californians, who use to be so laid back.

[VetLegion]

Originally posted by Pekka
In here, average yearly income, ~30k. Average house, 200k. So about x 7. Add mega huge taxes and you won't be owning a house any time soon anyway. You're screwed.

OK, you don't need a huge house to live in. How much would a flat of 60 square meters in a normal Helsinki hood cost me?