Sydney property is now more unaffordable then ever according to Residex’s John Edwards, with prices expected to rise even higher.
Mr Edwards believes the driving force behind the growth in values is existing homeowners with reasonable levels of income and assets looking at investments.
According to Mr Edwards, Sydney house growth from August 2012 to August 2013 was 9.43 per cent. From August 2013 to August 2014 it was recorded at 16.93 per cent. Over the last quarter, 3.5 per cent growth was recorded, with 1.52 per cent over the month.
Sydney’s unit growth from August 2012 to August 2013 was 2.68 per cent. From August 2013 to August 2014 it was recorded at 14.31 per cent. Over the last quarter, 3.64 per cent growth was recorded, with 0.1 per cent over the month.
In the latest Residex newsletter, Mr Edwards said historically at these levels our markets would fall in value, but it is this high level of “un-affordability” that probably leads many to suggest we are in a ‘housing bubble’.
“It takes about 54 per cent of after-tax income to make loan repayments on the median value home of $852,500; it takes close to eight times the annual median income to buy the median Sydney home. These ratios are extraordinarily high based on historical data,” said Mr Edwards.
“However, something has changed: the buyers in our markets. Our measure is likely no longer as valid as it once was because the current buyers are no longer median income families. Median income families living in the median value areas of Sydney are largely renting.”
By the first half of 2019, Mr Edwards estimates the median value of house prices in Sydney will be above $2 million.
“By the end of 2019 it is estimated there will be 91 suburbs with a median value in excess of $2 million,” he said. “This represents about 9.5 per cent of the city. The percentage of the city with median suburb value over $1 million will be approximately 43.25 per cent.”
Source: Residential Property Manager
For more information call ray White Real Estate Narrabeen 9970 6777 or Ray White Real Estate Narraweena 9984 7100
1. Research & plan Before you consider selling, research the market, focusing on properties in your area. Is it a good time to sell? Where do you intend to move next? What’s your budget, including moving? You don’t need all the answers, but you should develop a clear set of goals … Read more
Federal Treasurer Scott Morrison’s second budget was delivered this month to Australia, with a range of changes for first home buyers, property investors and older Australians looking to downsize. Overall, the measures are designed to free up more development land and get first home buyers into the market sooner. Here … Read more