Housing price versus commute time
A natural by-product of the Australian housing boom has been an increase in commute time for the average Australian. According to Ford's commuter calculator, an average worker will spend the equivalent of 417 days commuting to and from the office in their lifetime. This adds up to 1.1 years either sitting behind the wheel or on a crowded train or bus.
Time is just the tip of the iceberg when deciding what house price to settle for compared to the distance to the office. There is also productivity to consider as well as how much money commuting will cost you over your working life.
This is what economists in the Bloomberg article Extreme Commuting call "the commuting paradox."
'Most people travel long distances with the idea that they'll accept the burden for something better, be it a house, salary, or school. They presume the trade-off is worth the agony. But studies show that commuters are on average much less satisfied with their lives than non-commuters. A commuter who travels one hour, one way, would have to make 40% more than his current salary to be as fully satisfied with his life as a non-commuter,' say economists Bruno S. Frey and Alois Stutzer of the University of Zurich's Institute for Empirical Research in Economics.
The rational solution is clear: live closer to where you work. However, in the current housing market, this is out of reach for most people who work in a capital city. The solution is to strike the right balance, where the cost of your commute in relation to money, time, sleep and stress does not outweigh the savings made by living further out of town.
It is often hard to calculate this before you buy and it's important to remember traffic always changes as suburbs develop over time. In the last 10 years alone, Sydney's peak hour has more than doubled in the evening time. This has led to radio stations having to re-schedule station programs this year to match the demand of workers who's journey in the car home surpasses the traditional 'drive' shows which finished before 6 pm.
Public transport access to work is a big benefit, as it means the hours lost on the way to work can be filled with somewhat productive or leisure activities. Driving to work will incur expenses for fuel, car upkeep, parking and time lost driving yourself.
It is predicted that families who are commuting for more than two hours every day in Australia may be loosing up to $60 000 per annum in productivity and transport costs.
Comparing the price of your new home or rental property with distance to your work is a very difficult scale to balance. The best approach is to do as much research as possible.
You could take an old-fashioned route and wake up at the crack of dawn, drive to the property and park there. You can then undertake the commute to work as if you lived in the new property. This one is difficult, especially if you are moving interstate. Another way you can test the waters is to join an online community like Nabo. Just select your new suburb and get in contact with your new neighbours who might work in the city and commute too.
Starting conversations with neighbours is a great way to learn out more about a new property before you place a bid or sign a contract. They may even give you more than just commuting insights into the area.