Can tenants afford prime locations?
The majority of Australian property exhibitions in overseas countries promote properties close to the city centres. As these are usually prime locations, the properties on offer command prime rents. To use Melbourne as an example, current rents for city-centre apartments range from about AUD250 per week for a 1-bedroom flat up to AUD600 per week for a high floor 3-bedroom unit. To the uninitiated, these rents may look unaffordable to Australians, particularly when other living expenses and income tax are taken into account. It is generaaly accepted that the average income for those living in inner Melbourne as around AUD84,000 per annum. Using this figure, the following examples show how easily affordable prime inner-city apartments in fact are. Example A Single Person AUD Annual income say 84,000 Less tax (@approx 30%): 25,200 Disposable income 58,800 1/3 for rent* 19,600 or 376 per week *The “rule of thumb” in Australia is that people can allocate about one third of their income to m
