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The average Sydney house now costs 26 times the national median income – and prices are only set to rise higher.
Australian house prices witnessed their fifth consecutive rise in the March quarter 2024, while unit prices also rose for the fourth quarter in a row.
No less than 10 historic records were broken in the first three months of 2024.
In four capital cities – Sydney, Brisbane, Adelaide and Perth – house prices hit a record high; Brisbane, Adelaide and Perth saw record-high unit prices; and Perth units saw their steepest price gain in over three years.
In Sydney, the median house price surpassed $1.6 million for the first time in history, while the median house in Adelaide rose to over $900,000.
In a country where the median annual income is still under $68,000 – and under $59,000 for women – these housing conditions pose a major challenge.
And, while the last quarter saw a slower pace of growth than previous quarters, the trend continues to be slanted decidedly upwards.
“Despite the challenges of cost-of-living pressures and high-interest rates, property prices are expected to continue rising,” said Dr Nicola Powell, chief of research and economics at Domain.
She explained: “The upward trend is driven by various factors, including a chronic shortage of new homes, strong population growth, high building costs, and a tight rental market, all of which boost housing demand.”
Across the combined capital cities, the median house now costs $1.1 million.
The median house price in Canberra is $1.05 million, followed by Melbourne ($1.03 million), Brisbane ($924,498), Adelaide ($902,332), Perth ($777,921) and Darwin ($573,856).
Units remain considerably cheaper than detached houses, with the median Australian unit currently costing $637,578 – almost half the price of a house.
“The challenging rental conditions will likely push some prospective first home buyers to fast-track their journey toward home ownership,” said Powell.
“We expect increased demand at the more affordable end of the market, particularly for units. This trend will likely affect affordable markets such as Perth, Brisbane and Adelaide, along with units in higher-priced markets like Sydney.”
She noted that while the first three months of 2024 saw a slower pace of growth than previous quarters, this trend should not be relied upon.
“A reduction in the cash rate could shift this trend, potentially increasing housing turnover,” Powell warned.
She added that “Perth and Brisbane have experienced a long-term decrease in the number of properties for sale, which has contributed to significant price growth in these cities.”
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