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Property prices stable everywhere except Sydney

The Australian Bureau of Statistics says property prices are on the rise, but is that really the case, or are a few exceptionally expensive cities pushing up the national average?

According to the ABS, the average price of residential properties in Australia is rising, and rising quickly. In March 2015, the mean price was up to $576,100, which is a 6.9% increase from $571,500 in December 2014 and leaves December 2013’s mean price of $539,000 in the dust.

As of August 2015, RealEstate.com.au lists the median house prices in Australia as showing a market trend over the past 12 months of mostly stable prices in most capital cities. In fact, housing prices in Canberra and Darwin are actually lowering overall.

The exception to this stability is Sydney, where prices continue to rise at the highest rate since the 1980s. Domain reports that Sydney’s overall median house price has topped $1 million in mid-2015, with higher prices than London and approaching New York’s prices.

City House – to buy ($) House – to rent ($/week) Unit – to buy ($) Unit – to rent ($/week) Market trend in price movement
Sydney 1,000,600 400 810,000 700 Rising
Melbourne 1,512,500 370 450,000 460 Stable
Brisbane Varies by suburb: 727,000 Kelvin Grove / 560,000 Mansfield / 315,000 Browns Plains 510 497,000 570 Stable
Adelaide 550,000 415 393,500 410 Stable
Canberra Varies by suburb: 753,000 Ainslie / 859,000 Bruce / 360,000 Coombs Varies by suburb: 498 Ainslie / 550 Bruce 410,000 550 Lowering slowly
Hobart 465,000 400 456,000 325 Rising for houses and stable for units
Perth 810,000 550 480,000 480 Stable
Darwin Varies by suburb: 817,500 Lyons / 687,000 Howard Springs 725 465,000 620 Lowering slowly

 

CANSTAR also publishes information about housing affordability and the cost of the average mortgage in selected Australian states:

The Reserve Bank’s Head of Financial Stability, Dr Luci Ellis, spoke on 8th September at a Sydney real estate conference, where she said prices will increase regardless of how much land is released for housing because people generally want to live in certain areas.

With housing prices having stabilised at such a high plateau, young people are going into high levels of debt to afford a house. According to the Generational Change in Home Purchase Opportunity in Australia report by the Australian Housing and Urban Research Institute, less than 5% of 18- to 34-year-olds own their own home in 2015, compared to 11% in 2001 and 61% in 1981.

The 2011 AMP NATSEM report showed that even during the GFC period of lower house prices, 35% of Gen Y homeowners (aged 15 – 29 at the time) were in debt stress, with over 30% of their income disappearing in mortgage repayments. 10% were experiencing extreme debt stress, with over 50% of their income going towards repayments.

If you are in this situation, know the warning signs of debt stress, and follow our tips for staying calm until finances improve.

 

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