Melbourne: love it, can’t afford it

by Chris Lang on December 8, 2010

Melbourne Terrace Houses Did I mention how much I love Melbourne?

Honestly, I think Melbourne is amazing, and I’ve traveled the world and seen plenty of other places. For a city with the population of around 4 million, it has this unique cozy feeling about it. It doesn’t feel like a huge megalopolis, full of concrete, busy and intimidating. On contrary, even in the city center the streets make you feel at home, at ease, relaxed.

Melbourne Flinders Station

Before I came to Australia I’ve read in the papers about Melbourne being one of the most livable cities in the world, and that reinforced our (my partner’s and mine) decision to live in Melbourne. That was way back in 2006, and many things have changed since – in particular the housing prices. This is why I was surprised the Economist Intelligence Unit still rated Melbourne third in the list of world’s most livable cities in 2010. Of 140 cities all over the world, Melbourne ranks the third with a score 97.5 out of 100. Sydney is also very high on that list, it ranks 7th – there is certainly something about Australia they quite like.

Melbourne CBD trams

But seriously, if you think about it – how can it be that the two most unaffordable cities in Australia, Melbourne and Sydney, end up high on the world’s most livable cities list? Melbourne is the third and Sydney is the seventh, why should they be considered such desirable places to live, when the housing affordability is record low? Quoting from the recent press release by HIA “It now takes an income double the average to affordably service a mortgage on a median priced dwelling in Australia’s two largest cities.” said HIA’s Chief Economist, Dr Harley Dale.

When I looked into this a bit more, some things became clearer. This survey compares cities by the standard of living – they look at things like stability (the absence of terrorism), healthcare, culture and environment, education and infrastructure. I don’t think they have the cost of housing included as one of the criteria – otherwise that could have affected Melbourne’s position on that list.

Can you afford to buy a house in Melbourne or Sydney? If not, what’s your action plan?

Photo sources 1,2,3.

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