Over the past year, the value of Australian properties have risen at a rate not seen in decades, and Sydney has led the way. With stunning beaches, the Opera House and Harbour Bridge, Sydney is the home of Australian landmarks. Being the birthplace of icons like Hugh Jackman, Miranda Kerr and bands such as AC/DC and INXS, Sydney is considered a cultural centre of Australia and one of the most beautiful places in the world. As such, it’s not unexpected that the property market in Sydney is in high demand, and it is one of the most expensive property markets anywhere in the world indeed. Sydney regularly ranks high in terms of liveability, and over the past 50 years, the value of Sydney’s properties has risen 520% since the inflation calculation has begun.
Some reasons why Sydney house prices keep going up and up
Residential properties serve two purposes. They supply homes to the rental market and provide an opportunity for financial investment. When the Australian population grows, the need for housing also increases. As a result, demand for property as a financial investment can escalate and cause the prices to go up. Investing in Sydney real estate can be very rewarding. However, the Australian property market is influenced by economic factors such as interest rates, affecting the demand.
The Australian property market has been increasing rapidly for some time. A closer look reveals that the Melbourne median price for a typical home is close to one million dollars and well over half a million dollars for a standard apartment. In Sydney, the property prices are much higher, and according to Michael Yardney’s propertyupdate are still forecast to grow.
Sydney’s prestige home prices are increasing at a higher rate than the price of the most affordable home, and even the median properties are seeing rapid gains. The cost of the most expensive home rose 10.6% in the first three months of the year alone. In the long term, the prime reason for the rise in demand for real estate is population growth as increasingly people need a place to live. Nationally, the population growth rate in Australia increased by 0.5% last year. From the early fifties until the onset of the covid epidemic, it grew at an annual rate of 1.8%, mainly in Sydney and Melbourne and immigration was the prime reason for that.
Immigration brings many benefits to Australia, ranging from economic growth to greater cultural diversity. But there are also trade-offs, such as rising housing demand.
Several economic and social factors unrelated to housing determine Australia’s national immigration policy. Various economists have studied the effects of immigration on home prices in Sydney. According to them, if immigration did not increase, rent would reduce and negatively affect the home purchase price. However, this study can’t be correct. Migration in Australia has come to a sudden halt in the last two years. Yet the property prices keep increasing at a rate not seen before in Sydney and all other cities throughout Australia.
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Development planning and control
Economists also believe the biggest reason for the housing shortage is that developers cannot build high-rise apartments in most Sydney areas. Strict planning regulations limit high-rise development to only specific regions. They point out suburbs such as Chatswood and Green Square, and despite community opposition, property prices have risen in areas without apartment buildings, keeping up with the surrounding suburbs.
Sydney property market is doubling.
According to Domain, Sydney home prices rose whopping 30.4% to a record annual increase 12 months from September, but growth is slowing significantly as new listings surpass sales.
In the September quarter, Sydney home prices rose just 4.6% to 1.5 million dollars, the half rise of March quarter and at a significantly lower rate than the previous three months, when prices rose 8.2%.
Sydney properties have substantially increased in recent years, especially the last 12 months, and investing in the Sydney property market may sound very tempting indeed. However, if you decide on such a significant financial commitment, make sure that unforeseen circumstances don’t erode its worth. Ensuring your property investment structure is not compromised by wood-destroying pests is at most a priority. Thus, if you plan to purchase a property in Sydney, click here for pest control services to protect your asset from damaging pests.