Back in 1970, you could buy a house in Sydney for $18,700. In 1980, the average house price was around $76,500. By 1990, the number had more than doubled to $184,600. In 2000, you needed around $312,000 to purchase a property in Sydney, with the number increasing to $575,900 in 2010.
And these days? These days you’re looking at over $1,000,000 if you plan on buying a property in Sydney. According to data supplied by the ABS, property prices in Australia (and Sydney in particular) have skyrocketed over the past 25 years.
Housing price growth in Australia over the past 25 years
In a report conducted by CoreLogic and Aussie, we’ve seen strong housing market conditions over the past 25 years – something that doesn’t come as a surprise to anyone who has kept an eye on the property market. However, when we look at the data, the figures are staggering.
“Since 1993, median house and unit values have increased by 412% and 316% respectively, providing homeowners with a significant wealth boost. The capital gain over the past 25 years equates to an annual growth rate of 6.8% for houses and 5.9% for units; in dollar value terms, the median value of the typical Australian house has risen by $459,900 since 1993 and unit values are $392,000 higher.”
Let’s consider the same rate of growth for the next couple of decades. This means that national property values in Australia will reach an average of $2.9 million for houses and $2.1 million for apartments by 2045! For Sydney in particular, prices will rise to an average of $6.3 million.
While markets can fluctuate, property prices do tend to even out, and the above doesn’t even consider the impact that COVID-19 has had on the people of Australia. With all-time low interest rates and buyer demand only increasing, Australian house prices are rising at the fastest pace in 32 years.
What does this mean for property buyers?
As can be expected, because wage growth hasn’t been able to match the same rate as property prices, mortgage sizes have increased at the same pace as property values, with mortgages up 376% (or 6.4% per year). Compared to 25 years ago when the average loan size was only $81,500, this shows a marked increase, and housing affordability has become a concern for many Australians. For cities like Sydney and Melbourne where home values have increased dramatically, prospective buyers are feeling the pinch even more.
Is this likely to change any time soon? It appears not. However, luckily low interest rates mean that it is far easier for homebuyers to obtain a mortgage than it was 25 years ago – but saving up for that deposit will take some concerted effort.
Here at Wills Property, we boast a range of property management services dedicated to helping you achieve the result you want. Call us today or browse our range of current properties.