Lets put all this Perth boom talk into perspective...
After RIO's 6000 job recruitment blitz, how many jobs are available on their recruitment site? just over 4%! what a blitz! You'd think at least 10-20% of these jobs up to feed into the hype
Now hows that Perth Property Market looking for last quarter? According to our friends at RPData... down again :(
Correct me if I'm wrong but wasn't the median for Perth over $500,000 a couple of years ago?
Now for the great rental crisis of 2012, even REIWA is saying... well... maybe this great crisis of skyrocketing rents and 50 people at inspections is just hype?
Unfortunately there aren't enough of these guys below (actually they only make up directly and indirectly less than 18% of Perth's population)
Now deviating from the fact that house prices should only rise with inflation over the long term and lets say Australia is 'different' and Perth is even more 'unique' and can grow at 6% so roughly DOUBLE the rate of inflation over the long term... based on the chart below taking a circa $35,000 median multiplying it by 1.06^32 to bring us to 2010 is a whopping $225,868.50 median price!
This median price of $225,868.50 sits in the Goldilocks zone of housing affordability! This is taking a median income in Perth in 2010 of circa $65,000 to arrive at a House Price Median to Average Wage ratio of 3.5
Now this information is a little dated but still relevant none the less:
This chart above assumes the Goldilocks zone of housing affordability... 3.5 times earnings
Finally to put it all into perspective
In June 2010, in order for someone earning the casual hourly wage rate of $17.99 per hour to afford a median rental unit in Perth at $350/week, they would have to work 65 hours per week. Someone earning the minimum hourly wage of $14.99 would have to work 78 hours a week to afford the same unit.
A full-time worker earning the minimum weekly wage of $570 would have to spend 61% of their income on housing for a median rental unit in the Perth metropolitan area.
And how bigger demographic are these workers in $14.99-$17.99 an hour bracket? Big enough to ensure that when all the boomers retire, i.e. stop trading expensive housing stock between themselves, we will witness the greatest evaporation of paper wealth this country has ever seen as there will be no one left who can afford to kick this can down the road!
