Anyone who has been after watching the real estate market will know that house prices in Australia have been on the rise. According to CoreLogic RP Data’s monthly indices, the median price of dwellings in the five capital city aggregate was $726,050 by January 31, which is a 7.5 per cent year-on-year increase.
A closer look will show that this has been driven heavily by the phenomenal climb in Sydney property prices. A great result for local vendors but not so much for home buyers, especially those who are completely new to the market.
From a state perspective, CoreLogic says that there were 341 suburbs in New South Wales where the median house price was greater than $1 million by the end of 2015. This is an addition of 84 suburbs in the space of 12 months – a startling increase. Furthermore, the top ten most expensive suburbs in Australia are all in Sydney aside from Peppermint Grove in Perth.
This is a well-trodden topic that many house and mortgage hunters have touched upon and thankfully, change is coming. Since the tightening of investment lending by many banks, a lot of the heat in the Sydney market has cooled off. A February 1 release by CoreLogic shows that from a quarterly perspective, Sydney’s dwelling values actually dropped by 2.1 per cent to a median price of $776,000.
As the supply of new housing continues pouring in, and price growth stabilises, what other factors are involved with repairing affordability?
A different perspective
A January 26 release by the Planning Institute of Australia (PIA) explores the issue, responding to lobby group Demographia, which has attributed this deterioration in affordability to poor planning issues.
“Planning is undoubtedly a factor in addressing housing affordability, but it is only one part of the complex puzzle,” says PIA CEO Kirsty Kelly, indicating that there are many different driving elements involved.
“The housing affordability debate must go beyond the price point of a house to consider the lifestyle costs associated with living in a house, including the travel and costs associated with access to jobs and services.”
The organisation is pushing for a more holistic approach to remedying this problem through governmental leadership as well as financial and tax incentives.
As the health of housing affordability returns to the Sydney market, you might feel like it’s your turn to get a piece of the pie. The lending professionals at Police Bank are ready to provide you with the loans that you need, configured to your financial capabilities.