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Sydney Tops The Race For Capital City Home Value Growth

capital city home valuesIn a recent article on home values, Cameron Kusher shares a few interesting statistics regarding growth in capital city home values and the longevity of growth periods in an article for the Property Update.

8.7% increase since last trough

Capital cities have witnessed an 8.7% increase in combined home values since the property market bottomed out in May 2012. Over the last one year, this figure has been 5.5%. Kusher is not disappointed with the figures (upward curves are always met with cheer) but states in the same breath that the increase is nowhere near the three previous growth cycles.

In comparison to 8.7% posted now (keeping 17 months as yardstick), combined capital city home values had exhibited a hike of 27.6% in 2001, 15.1% in 2007 and 19.3% in 2009.

Sydney dethrones Melbourne

Another noteworthy trend is the way Sydney has taken the baton from Melbourne. In the previous three growth cycles, Melbourne had topped the chart but this time Sydney has steered clear of it by 2.6%. Both have outperformed the average of 8.7% (Melbourne posts 9.6% and Sydney 12.2%)

Small longevity for Sydney

Another aspect worth pondering over is the longevity of growth periods. Sydney along with Melbourne exhibits least tenure for its growth period. Compare them to the growth periods in Brisbane, Hobart or Perth and you will get the idea.

This is because house prices in Sydney and Melbourne already remain on the higher side and growth fails to sustain itself for long due to affordability issues.

You can read the original article here.

Sydney has posted overall growth

I think Sydney, unlike Melbourne, has posted overall growth. Melbourne property prices have done exceedingly well in the middle ring area but the inner ring and suburbs have shown only modest growth. Sydney on the other hand has posted handsome growth in all the areas and the figure 12.2% reflects this trend.

I also believe that growth statistics should always be seen in the light of “real growth” and not ‘nominal growth”. After all, “household incomes” and “wages earned’ are also a couple of attributes which have been on an upward curve over the same period.

Do you think Sydney will increase the gap even further, now that it has taken the lead from Melbourne for the first time in 2 decades?