Sydney dwelling prices – expensive or unaffordable?
Houses in Sydney might be a tad expensive but they are nowhere close to being unaffordable. Over a relatively long time period, such prices only mean a stable economy. The housing affordability data can be quite suggestive, based on the December quarter Reserve Bank of Australia bulletin (pages 13 to 22).
There are two sides of the equation; the housing side and the income side. It is worthwhile to ponder over one of the crux points of the Sydney housing side – should we use average prices or median prices while making estimates?
Average dwelling prices much lower than median prices
The average price for a dwelling in Australia is about 4.1 times of the average annual income. The median home price is about 6.6 times the average income. Sydney dwelling prices are 8.2 times the average income.
Low dwelling prices in Sydney
Let us find out how the prices in Sydney for houses vs apartments compared for the year 2012:
- 24.7% of Sydney houses sold below $400,000
- 36.4% of Sydney apartments sold below $400,000.
- Sydney displayed a $2 million + tag for 3% of its houses and 0.9% of apartments.
High density housing prices – an exception to the rule
The data presented is fairly suggestive and shows how prices keep reducing the farther you keep moving from the capital city GPO. The only exception to the rule is provided by the medium or high density housings – they show a very high percentage of below $400,000 prices even when they are close to the GPO.
There are clearly affordable dwellings in Sydney
The difference between median and average home prices is significant. It shows that the majority of dwellings are relatively pricey, but that there is a good number of much cheaper housing available as well. You do have to move away from the major CBD areas though to find them or consider high density dwellings.
You can read the full RBA bulletin here.
Do you feel Sydney homes are becoming unaffordable for too many people?