Sydney home buyers will have to pay very different prices for properties in five years time, new research shows. Check out how much homes in your area will be worth.
Don’t miss out on the headlines from Property. Followed categories will be added to My News.
Paying nearly $2m for a house will be the norm in Sydney in the next five years if property values continue to grow at the same rate they have over the past decade.
That’s according to research from realestate.com.au, which warned recent runaway growth in prices was unsustainable and posed major challenges for housing affordability.
The data provided exclusively to The Sunday Telegraph showed the median house price would be $1.92m in 2027 and the median unit price would be $1.02m.
Sydney prices would also be nearly triple those in Perth, Adelaide and Darwin if the current growth trajectory continued.
Home buyers in Melbourne would pay about $1.18m for a house in 2027, which would be less than Sydney’s current median house price of about $1.23m.
Realestate.com.au economist Paul Ryan said a circa $2m median in Sydney represented an extreme scenario for 2027 as the spectacular levels of average annual growth seen over the last decade would need to be repeated in coming years.
Sydney’s median house price was $580,000 in 2011 and grew at an average annual rate of about 7.7 per cent over the past 10 years.
Mr Ryan said much of the growth was in an environment of low interest rates.
Extrapolating that growth into the future did not reflect the most realistic scenario for Sydney housing but did illustrate the heights prices could reach if the market was left unchecked, Mr Ryan said.
“Growth in recent years has been exceptional,” he said, adding that regulators would need to intervene in the market next year if rampant price hikes continued.
Were interest rates to gradually rise, it would put Sydney on a different path and hinder growth in prices, but buyers would still need to prepare to pay big sums in the years to come, Mr Ryan said.
Realestate.com.au’s analysis showed that, even if prices rose at a similar rate to inflation over the next five years, the median house price would still be near $1.5m in 2027.
“Affordability is likely to always remain challenging for Sydney,” Mr Ryan said. “More would need to be done to help people who are struggling to come up with a deposit.”
Affordability has been particularly stretched on the northern beaches, which was easily the fastest growing housing market over the last five years.
House prices in suburbs Avalon Beach and Newport grew by more than 80 per cent over the period, while unit prices in Manly increased 60 per cent.
Stone Real Estate agent Eddy Piddington said buyer demand, coupled with a limited supply of housing, suggested there would be more growth in certain pockets of the beaches in coming years.
“It’s got the lifestyle people want and we really saw that in lockdown,” he said.
“People wanted to be near the water and outdoor lifestyle, but stock levels (in the region) are always low and there is little development in the area.”
Manly resident Alison Walker recently sold her home of five years and will soon move her family to Curl Curl, but was shocked at the price she got for her three-bedroom apartment.
She was offered $3.15m, which was more than double the price she paid in 2015. “We exchanged in just six days,” she said.
“But you have to remember you buy and sell in the same market. When we were looking for our (next) house we realised what was $2.5m last year is now $3.5m or $4m.”
Rabbitohs fullback Latrell Mitchell is on the move, with the NRL star splashing $4.275m on a luxurious five-bedroom home with putting green in Sydney’s South.
One of Brisbane’s most illustrious historic homes has gone under the hammer today, with the winning bidder adding just $1000 once it hit the market. Follow the auction action in our blog.
Our Apps
02 8005 6525
info@aktengineering.com.au
Recent Comments