Median House Price Set to Cross $1 Million in Sydney
Phil McCarroll writes a piece for the website Your Investment Property wherein he states that the median house price in Sydney could go past the $1 million mark despite a mellowing down of the capital growth figure.
Taking median value above the $1 million
There are estimates that Sydney’s price growth in the coming year or so should be around the 13% mark and this will take the present median value of $880,000 past the $1 million mark. Between June 2014 and June 2015, Sydney’s prices have leapt by 16.3%.
What price growth constitutes a bubble?
Sydney has always faced the ‘bubble’ question, writes McCarroll. What kind of a price growth constitutes a bubble, he asks? Prices are rising because of the prevailing low interest rates and also the fact that there is a chronic undersupply of land. It is not a bubble, period!
You can read the original article here.
No Bubble in sight in Sydney
Sydney is still rock-steady; measuring its growth in the light of intrinsic fundamental values. No bubble is in sight. The prices are high, distinctly high but when adjusted for inflation, they are cheaper than say, they were 25 years ago. We cannot ignore the fact that the average household income has risen just the same and it has boosted our purchasing power.
Undersupply of development-ready land
When we talk about a chronic undersupply, we talk about all kinds of properties. I think what could hit Sydney hard is the lack of development-ready, investment grade properties. This said, the construction industry has risen from a long sleep and it is working hand in hand with the labour industry. The latter has got a shot in the arm due to the arrival of skilled workforce which comes as a part of net interstate immigrants.