Sydney and Melbourne among the five least-affordable cities in the world

By

Two Aussie cities rank least affordable globally, a new job could deliver 7% more pay, and popular hotel booking site fined $44 million.

Here are five things you may have missed this week.

Two Australian cities rank among the five least affordable globally

sydney melbourne among worlds least affordable cities

Two Aussie state capitals have the dubious distinction of being among the world's five least affordable cities.

The 2022 Demographia International Housing Affordability report from the Urban Reform Institute and the Frontier Centre for Public Policy, found Hong Kong is the world's least affordable property market.

That's followed by Sydney, Vancouver and San Jose (California not Costa Rica), with Melbourne rounding out the top five for poor affordability.

The study found "an unprecedented deterioration" in housing affordability - measured by property prices relative to incomes, during the COVID-19 pandemic.

The number of "severely" unaffordable property markets rose 60% in 2021 compared to 2019, the last pre-pandemic year.

The report adds that declining housing affordability has the potential to threaten the future of the middle-class, for whom housing is a key expense.

In a twist, the National Housing Finance and Investment Corporation (NHFIC), which oversees the First Home Guarantee, found Sydney and Hobart are Australia's least affordable markets for first homebuyers.

NHFIC says Hobart's bottom 60% of income earners can afford less than 10% of properties in the market - putting the Tasmanian capital on par with Sydney for lack of affordability.

Score a 7% pay rise

As wage growth plods along at a barely perceptible pace, the path to a fatter pay packet could lie with getting a new job.

A survey by recruitment firm Robert Half found almost eight out of ten (77%) employers are planning to increase starting salaries for new hires this year, offering 10% higher wages on average compared to last year.

That's almost 7% above the national average wage growth of 2.3% for 2021.

Better still, businesses are becoming less picky about a jobseeker's qualifications.

The same study found 84% of Australian employers are willing to compromise on key credentials for hard-to-fill roles.

One in five employers are more flexible about a candidate's education and technical qualifications, while 16% are prepared to offer some wiggle room on how much experience a jobseeker needs to land a role.

Hotel booking site cops $44.7 million penalty

When does a hotel booking site not deliver the best deal? When it favours hotel chains offering the highest pay per clicks.

The Federal Court has ordered accommodation site Trivago to pay $44.7 million in penalties for misleading consumers over hotel room rates.

The Court found Trivago used an algorithm that put significant weight on hotel booking sites that paid Trivago the highest fee per click when determining the deals to showcase on its website.

Trivago admitted that between 2016 and 2019 it received almost $58 million in cost-per-click fees from clicks on offers that were not the cheapest available.

The ACCC says this saw consumers overpay close to $38 million for hotel rooms featured in those offers.

ACCC Chair Gina Cass-Gottlieb says, "This penalty sends a strong message not just to Trivago, but to other comparison website, that they must not mislead consumers when making recommendations."

Dodgy behaviour dogs credit cards

Despite the growing popularity of buy now pay later, more than 13 million personal credit cards are still in use across Australia. And we don't always manage them wisely.

A Finder study confirms one in seven cardholders have put impulse buys on the plastic. Over one in ten only pay the minimum repayment each month, and the same proportion admit to never having checked their credit card statements.

Yet data from the Australian Payments Network (AusPayNet) shows a 9.2% rise in fraud on payment card transactions in the 12 months to 30 June 2021.

Amy Bradney-George of Finder, says "Monitoring your account will not only keep track of your spending, it will help you identify any unusual transactions before you lose serious money."

Hosts urged to check their cover

Opening your home to paying travellers via platforms like Airbnb or Stayz can be a handy way to earn a few extra bucks.

And it's a very popular strategy.

Almost 500,000 Australian hosts have listed their property for short term rentals since 2016.

However, the Insurance Council of Australia (ICA) is warning that home owners are unlikely to be covered for damage caused by short term tenants under their home and contents insurance.

Most insurers regard short term holiday rental as a commercial use of a property or a business activity.

A home building or contents claim rising from a property being rented to short term tenants may be declined, potentially leaving the host significantly out of pocket.

Some insurers have responded to the increasing popularity of short term rentals by offering specialty policies for those who self-manage their property.

According to the ICA, this type of cover can be tailored to the number of nights the property is rented, and the daily cost of cover can be as little as the price of a take-away coffee. These policies can cover guest-related damage, as well as personal liability if a paying guest is injured at your place.

Get stories like this in our newsletters.

Related Stories

A former Chartered Accountant, Nicola Field has been a regular contributor to Money for 20 years, and writes on personal finance issues for some of Australia's largest financial institutions. She is the author of Investing in Your Child's Future and Baby or Bust, and has collaborated with Paul Clitheroe on a variety of projects including radio scripts, newspaper columns, and several books.
Comments
John Fred
May 1, 2022 10.54pm

I lived in Spain and can assure you that properties in Madrid or Barcelona are more expensive then in Melbourne, with most people earning about half to what they earn here. How reliable are these sources?

Spain is not as expensive as Switzerland, Germany or even France and the UK.

So it makes zero sense to me.

Further Reading