Housing affordability plunges but RBA dismisses claims that the housing bubble has burst.
Amidst another rate rise and decreasing housing affordability in Sydney, there are suggestions again from economists that the housing bubble has burst but the RBA is quick to dismiss these claims.
The Daily Telegraph reported that figures released by property analysts Residex in May revealed Sydney now has 5347 streets where the median property value is over $1 million. That’s up from 3367 last year, a rise of 58 per cent.
With the most expensive properties traditionally being waterfront properties or luxury properties isolated to the northern and eastern suburbs of Sydney, the analysis shows the million-dollar mark is being achieved in outreaching western Sydney and southern Sydney suburbs.
The Daily Telegraph reported that streets that entered the territory this year include Lancelot St in Concord ($1.207 million from $984,500), Fitzroy St in Burwood ($1.2 million up from $851,030), Holt Rd in Taren Point ($1.27 million from $963,000), Lyneham Place in West Pennant Hills ($1.176 million from $817,435) and Cromerty Place in Glenhaven ($1.18 million from $997,267).
The nation’s most expensive road remains Billyard Ave in the harbourside suburbs of Elizabeth Bay, with a median value of $17.8 million previously home to media heir Lachlan Murdoch and actor Russell Crowe.
Sydney’s median house price overall is $651,500 according to April figures almost $190,000 ahead of London, where the median price for a two- to three-bedroom house is $462,000.
As reported in The Daily Telegraph, according to research done by Residex which did a comparison of real estate prices in the biggest cities around the world, the average house in Sydney is more expensive than the average home in London and New York.
Residex head of research John Lindeman said: “It’s quite incredible that houses are cheaper in those cities than in Sydney. But it’s caused by the demand for Sydney houses, which keeps outpacing the supply – and that’s not going to change any time soon.”
House prices have continued to rise, despite the RBA’s six rate rises since October last year, with commentators blaming the widening gap between housing demand and supply.
The decline in housing affordability continued early in 2010 with higher house prices, increased interest rates, and the removal of the first home buyers’ boost according to the latest HIA-CBA First Home Buyer Affordability Report.
HIA Senior Economist, Mr Ben Phillips, said that further interest rate rises in April and May of 2010 will likely mean that the June quarter result will see affordability crash to the record lows experienced when interest rates were above 9 per cent in 2007.
“With the Reserve Bank insistent on further rate rises, housing affordability will once again be a key issue in the mortgage belt regions of Australia,” said Ben Phillips.
“We are yet to see the required level of co-operation between all levels of government to deliver critical housing infrastructure without hitting new home buyers,” said Ben Phillips.
“Higher interest rates, exorbitant infrastructure charges, an overly restrictive and time consuming planning system continue to fuel Australia’s affordability crisis. Overcoming these issues will go a long way towards restoring housing affordability in Australia,” said Ben Phillips.
Luci Ellis from the RBA agrees that the limited supply of quality housing is putting added pressure on home buyers and forcing housing prices upward but financial lenders will need to remain stringent in home loan approvals.
“Housing prices have been under upward pressure in Australia. The nature of the demand shock Australia faces means that it would be helpful if more of that demand could be accommodated with extra homes for occupation, instead of by higher prices. Some of that pick-up in construction does seem to be happening.”
Astute buyers facing interest rate rises, a shortage of quality properties and decreasing housing affordability choose to use buyers agents in Sydney like Amanda to source properties for them. Buyers agents bypass the cattle call of open houses and show you silent listings (houses not yet listed on the open market), arrange private viewings and head to the streets to find properties for sale in your desired locations.
Contact us if you would like help buying real estate in Sydney or surrounding areas such as Sydney’s inner west, lower, mid and upper north shore and northern beaches regions.
Amanda On My Side offers exceptional buyers agent services throughout Sydney and across Australia. Engage a professional real estate buyers agent to help you find the best property at the right price. Buyers agents, also known as property finders or a buyers advocate, can help find, research and bid on your next home or investment property. Need a buyers Agent Sydney – then you need Amanda on your Side.
Tags: buyers agent, housing affordability
