According to the recent Economist Intelligence Unit’s Global Liveability Report 2017, the city of Melbourne — the capital of Victoria — is the world’s most liveable city.
This is the seventh year in a row that Melbourne has topped the charts. The city, trumping Vienna and Vancouver by a close shave, was awarded a resounding 97.5 out of 100, scoring high on factors such as healthcare, education, infrastructure, culture, environment, and stability.
What’s more, its high score outclassed rival city Sydney, which lost its place in the top 10 for the first time due to, as claimed by the report, “growing concerns over possible terror attacks.”
The achievement may have many in the Victorian tourism sector downing a glass of celebratory sparkling wine, but the survey may not accurately reflect the level of liveability experienced by locals. Due to an increase in property prices, juxtaposed against stagnating wages, Melburnians may have “outlived” their comfortable days on the banks of the Yarra River.
Property bubble and rental hikes
Housing affordability in Australia has broadly declined since the early 1980s. Factors for this include population growth, the slow pace of new land released for housing development, a surge in foreign investment, lower interest rates, and the deregulation of financial markets resulting in an expansion of mortgage credit.
As such, overall property prices nationwide have increased by 78% in the least 30 years.
At the forefront of price, hikes are properties within Sydney and Melbourne. Sydney, to date, has a median house price of $922,329. Melbourne’s median house price sits firmly at $677,580. The increase in house prices has not only impacted on the ability for locals to own property, particularly newcomers and first homeowners but also on rental affordability.
Rents, according to the Parliament of Australia, have also increased exponentially. For example, in Melbourne, tenants are expected to fork out a generous $313 per week.
To offer some perspective, the Australian rental median is 9.3% higher than that of the U.S., placing pressure on residents to maintain the cost of living in a country that boasts the world’s most liveable city.
Wage recession and the cost of living
Residential buildings stand beyond a marina at night in the Docklands area of Melbourne, Australia, a rental pipe dream for some. Photographer: Carla Gottgens/Bloomberg
In stark contrast to booming house prices, Australian wages have stagnated, mirroring global trends.
According to the Reserve Bank of Australia, wages used to increase at a rate of 5-7% nationwide in the early nineties. Nowadays, Australians are lucky to experience a 2-3% increase per annum.
In addition to this, the cost of living in Australia has also spiked. The Australian Bureau of Statistics indicated a 62% increase in average weekly housing costs between 2013 and 2014.
What all of these factors equate to is a strain on the nation’s macro-economy, a resident’s expendable income, and, most importantly, their ability to maintain a near-impossible expenditure of funds.
This has forced locals, particularly in Melbourne, which is experiencing a rental crisis, to move back in with their parents, pack into a shared house, sleep on a friend’s couch or, in extreme cases, the world’s most “livable” city considering how difficult it is for many residents even to survive there. Consider the prospect of homelessness.
With this in mind — despite tourists being able to afford the best Australia has to offer, and locals enjoying a great run in terms of healthcare, education, and culture — Melbourne may not, in real terms, be
Courtesy of forbes.com and credited to Milly
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