The huge rise in the cost of housing has nearly been matched by rises in wages, according to a leading realtor.

Despite the fact that the average cost of a house has reached nearly $1 million, Coldwell Banker JW Bermuda Realty said in their June report that the jump was not as high as had been thought.

It said that 40 years ago the average wage was 7 percent of the cost of a house, and now it was 5 percent - and that is based on the wages of a single earner with many households with two salaries in this day and age.

"Many people have been talking about the recent headline in the May 21, 2003 issue of The Royal Gazette `The average price of a piece of the rock? How about a cool $1m'", said the report. "While this may be astonishing to some, take into consideration what property cost versus wages were 40 years ago."

The report went on to say that recent investigation said that a typical family home (3 bedroom with 0.2 acre) within a central parish could cost approximately $53,000 with an average per annum wage of $3,744 or 7 percent of the cost of the property.

The realtor went on to say that compared with a typical $950,000 house today and an average per annum income of $50,000 per income earner or 5 percent of the cost of the property.

"Additionally, it was common for households in 1960 to have one "bread winner" versus the norm today of most married households having two income earners."

The realtor also explained how their figures had shown that the average cost of a house had risen to $950,000 this year.

"The research information gathered for today's average property prices is compiled from information on every property transaction in Bermuda which is entered into a complex database by JW Bermuda Realty - Realty Plus," the company explained. "This information is an invaluable resource for appraisals and home price comparables that assist in the determination of the fair market value of a property."

It went on to explain how the high price of a house in Bermuda is arrived at. it said that a sales representative does not set the value of a property, but the vendor or seller set the price.

"Ultimately the selling price is determined by what the market can bear," it said. "The sales representative's job is to give the vendor guidance in determining the listing price, sometimes this information is well received, other times it is not."

And it went on to say that the lending institutions also have a great deal of leverage in asserting the final selling price as the vast majority of properties sold require a mortgage and the banks require an appraisal for all mortgages to determine the maximum value of a property.

"For example if a property is listed at $850,000 and an offer comes in at the full price, but the appraised value comes back at $825,000, the purchaser needs to make up the difference between the appraised price and the selling price (or $25,000) in addition to the minimum deposit required by the bank.

"Often this is where a deal may fall apart. Many times we see purchasers unable or unwilling to make up the deficit between the valued and offered price.

"In today's economy we have a 70 year cycle stock market low, the lending institutions offering more competitive financing terms including 95 percent financing coupled with lack of inventory, it remains a buoyant seller's market."

At the end of last month The Royal Gazette revealed that owning a piece of the rock is getting further out of the reach of the ordinary Bermudian - as the cost of an average family home has soared to nearly $1 million.

The story relied on data compiled by two separate realtors has shown that the cost of a single family dwelling unit in Bermuda has risen to new heights.

It said that two separate estate agents have compiled the record breaking data - JW Bermuda Realty has put the average price of a house at $965,000 and Rego Realtors at $988,183.

Research done by JW Bermuda Realty showed that the average cost of a home was $870,000 in 2002, with the price rising by 10 percent in just six months.

This offers better returns than the stock market which has hit many Bermudians hard. This combined with the lowest interest rates in decades has more people with wealth putting their money into bricks and mortar.