Sydney’s property market has been attracting plenty of attention recently. Earlier today we learnt that the median Sydney house price has hit a mind-boggling $1 million while RBA governor Glenn Stevens, speaking last month, labeled the developments in some areas of the city’s property market as “crazy”.
While not to the same degree, there have also been similar sentiment expressed in relation to Melbourne’s hot property market.
Now, courtesy of CoreLogic-RP Data, come these two cracking charts that reveal that prices in these cities have far outpaced those seen in other capitals across the country.
The first shows the change in capital city home values over the past financial year. As it reveals, it’s literally a case of Sydney and Melbourne overshadowing the rest.
According to Cameron Kusher, researcher at Corelogic-RP Data, the 9.8% increase seen nationally in its home value index is entirely due to it being stock weighted, meaning “it is most heavily influenced by the larger housing markets”.
Essentially, with Sydney and Melbourne property prices surging, it dragged up the index due to those cities recording the largest amount of housing turnover.
Going back even further, to December 2008, capital city home prices have increased by 43.1%, courtesy of a 68.8% increase in Sydney and 54.1% gain in Melbourne. Kusher notes that price gains in the other capitals were far more modest, rising 8.9% in Brisbane, 12.4% in Adelaide, 14.3% in Perth, 0.2% in Hobart and 22.2% in both Darwin and Canberra.
If you think they’re big increases, you need to read on.
Going back to when the home value index was created towards the end of 1995, capital city house prices have gone stratospheric, surging 436.6% for houses and 330.4% for units.
To provide some perspective to those gains against wages growth, in original dollar terms, the Australian average weekly earnings over the past 20 years have gone up by just 103.2%.