As we already explained last month, the housing bubble (or lack thereof) in Sydney and Melbourne has evolved into a special brand of beast. Median house prices are at all-time highs – shooting affordability for many first home buyers squarely out the window. When single car spots in Kirribilli fetch over $100,000, you know things aren’t looking great.
Our conclusion there was fairly blunt – if you’re in your twenties, living in Sydney, and haven’t stumbled upon some juicy inheritance or other goldmine, renting is *likely* your most feasible option for now, as far as housing goes. However, a report from Fairfax’s Domain today twists the dagger even further, as new data reveals Sydney rental prices have risen by a staggering 3.9% in the last year – the highest hike recorded in five years.
By way of comparison – Sydney’s hike outshines other capital cities’ price increases in the past year: according to Domain, Brisbane and Canberra have recorded a 0% increase in renting prices from last year; Melbourne is up 2.6%, Adelaide is up 1.4%, while Perth and Darwin are down 6.5% and 7.7% respectively.
In Sydney, the median renting price currently sits at $530 – a fairly cheap sum, as far as city-dwellers would be concerned. Keep in mind, however, that this median takes in all of Sydney as a metropolitan sprawl – the median rental price in Sydney City and East is at $975. Ah, perspective. There you are.
Median prices in all other cities, save for Darwin, are looking pretty great, tbh. Domain’s data on the median house prices in Australian cities are as follows:
Sydney – $530
Melbourne – $390
Brisbane – $400
Today, Pedestrian spoke with Eliza Owen, Market Analyst at onthehouse.com.au, whose own data paints an even sorrier story for Sydney. In May this year, onthehouse.com.au estimated that rent on the median house in Sydney increased from $610 in May 2014 to $665 in May 2015. Eliza tell us that the current state of the market comes down to first home buyers being increasingly pushed out – struggling to keep up with investors’ competition.
“This [high rental prices] is very concerning, and likely to be the result of
first home buyers being priced out of the market due to unprecedented house
value increases and record low wage growth. When you can’t afford to buy
something you either stay at home with your parents, or (if you don’t have that
luxury), you rent.”
Eliza’s sentiment echoes Domain Group’s Senior Economist Andrew Wilson, who said supply was grossly outrunning demand in Sydney. “We would have thought that given that we have record numbers of investors, supply might have caught up to demand, but the new supply just can’t match the demand.”
Sydney, dark days indeed. But remember:
Via Domain.
