Sydney Housing Market - Current State and Future Prospects
August 2011
Dr Andrew Wilson - Senior Economist
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Sydney
Melbourne
Brisbane
Adelaide
Mar-11
Nov-10
Jul-10
Mar-10
Nov-09
Jul-09
Mar-09
Nov-08
Jul-08
Mar-08
Nov-07
Jul-07
Mar-07
Nov-06
Jul-06
Mar-06
Nov-05
Jul-05
Mar-05
Nov-04
Jul-04
Mar-04
Nov-03
Jul-03
Mar-03
Nov-02
Jul-02
Mar-02
Nov-01
Jul-01
Mar-01
Nov-00
Jul-00
Mar-00
Nov-99
House Price Index – Major Capitals
Major Capitals Quarterly Median House Price Index
400.00
300.00
200.00
100.00
Perth
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Major Capitals – 11 year House Price Performance
• 200% increase all capitals – Sydney 100%
• Sydney prices flat 2004-2009
• Perth prices boom 2005-2006
• Mini prices boom in Brisbane 2007
• National prices surge 2009-2010
– Melbourne rises 29% in a year
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First Home Owner Loans
May-2011
Jan-2011
Sep-2010
May-2010
Jan-2010
Sep-2009
May-2009
Jan-2009
Sep-2008
May-2008
Jan-2008
Sep-2007
May-2007
Jan-2007
Sep-2006
May-2006
Jan-2006
Sep-2005
May-2005
Jan-2005
Sep-2004
May-2004
Jan-2004
Sep-2003
May-2003
Jan-2003
Sep-2002
May-2002
Jan-2002
Sep-2001
May-2001
Jan-2001
Sep-2000
May-2000
Jan-2000
2009 Market Stimulus – First Home Owners Grant Boost
20000
30.0
18000
16000
25.0
14000
20.0
12000
10000
15.0
8000
6000
10.0
4000
5.0
2000
0
0.0
Proportion of All Loans
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2010 Affordability Collapses - Strong Price and Interest Rate Rises
$500,000
8.00%
$450,000
7.00%
$400,000
6.00%
$350,000
5.00%
$300,000
$250,000
4.00%
$200,000
3.00%
$150,000
2.00%
$100,000
1.00%
$50,000
Average National House Prices
Mar-11
Nov-10
Jul-10
Mar-10
Nov-09
Jul-09
Mar-09
Nov-08
Jul-08
Mar-08
Nov-07
Jul-07
Mar-07
Nov-06
Jul-06
Mar-06
Nov-05
Jul-05
Mar-05
Nov-04
Jul-04
Mar-04
Nov-03
Jul-03
Mar-03
Nov-02
Jul-02
Mar-02
Nov-01
Jul-01
Mar-01
Nov-00
Jul-00
0.00%
Mar-00
$0
Quarterly Interest Rates
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House Price Relativities – Major Capitals May Quarter 2011
$700,000
$646,662
$600,000
$558,525
$535,735
$500,000
$446,544
$438,255
Brisbane
Adelaide
$400,000
$300,000
$200,000
$100,000
$0
Sydney
Melbourne
Perth
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Housing Affordability – Major Capitals Median House Prices $1 Million +
120
104
100
80
60
40
30
20
13
2
4
Brisbane
Adelaide
0
Sydney
Melbourne
Perth
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Mar-04
May-04
Jul-04
Sep-04
Nov-04
Jan-05
Mar-05
May-05
Jul-05
Sep-05
Nov-05
Jan-06
Mar-06
May-06
Jul-06
Sep-06
Nov-06
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-08
Mar-08
May-08
Jul-08
Sep-08
Nov-08
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
House Rental Market – Major Capitals Quarterly Weekly Asking Rents
Major Capitals Quarterly Median House Rent Index
200.00
150.00
100.00
50.00
Sydney
Melbourne
Brisbane
Adelaide
Perth
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House Rental Relativities – Major Capitals May Quarter 2011
$600
$500
$490
$400
$360
$370
Melbourne
Brisbane
$380
$340
$300
$200
$100
$0
Sydney
Adelaide
Perth
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Housing Supply – Major Capitals
ABS Annual Dwelling Completions
60000
50000
40000
30000
20000
10000
0
2000
2001
2002
2003
2004
NSW
VIC
2005
QLD
2006
SA
2007
2008
2009
2010
WA
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Housing Supply – Major States March Quarter 2011
12000
10239
10000
8000
6796
6000
5320
4080
4000
1801
2000
0
NSW
VIC
QLD
SA
WA
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ABS Household Growth – Major Capitals 2007-2011
160,000
141,209
140,000
126,697
120,000
100,000
85,492
78,119
80,000
60,000
40,000
31,647
20,000
0
Sydney
Melbourne
Brisbane
Adelaide
Perth
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Dec-2007
Jan-2008
Feb-2008
Mar-2008
Apr-2008
May-2008
Jun-2008
Jul-2008
Aug-2008
Sep-2008
Oct-2008
Nov-2008
Dec-2008
Jan-2009
Feb-2009
Mar-2009
Apr-2009
May-2009
Jun-2009
Jul-2009
Aug-2009
Sep-2009
Oct-2009
Nov-2009
Dec-2009
Jan-2010
Feb-2010
Mar-2010
Apr-2010
May-2010
Jun-2010
Jul-2010
Aug-2010
Sep-2010
Oct-2010
Nov-2010
Dec-2010
Jan-2011
Feb-2011
Mar-2011
Apr-2011
May-2011
Jun-2011
Economic Growth – Major Capitals Quarterly ABS Unemployment Rate
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Sydney
Melbourne
Brisbane
Adelaide
Perth
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Economic Growth – Major Capitals June ABS Unemployment Rate
6.0
5.0
5.0
4.6
4.4
4.1
4.0
3.7
3.0
2.0
1.0
0.0
Sydney
Melbourne
Brisbane
Adelaide
Perth
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Major Capitals 2011-12 Housing Market Prospects
• Generally
– Economic growth to accelerate fuelled by resources boom –
$300 billion projects in pipeline
– Prospect of full employment and skilled labour shortages
– Upward pressure on wages
– Mixed sector performance and moderate inflation - interest rates
on hold
– Population increases fuelled by higher immigration
– High AUD implications for some regions
– Shortage of supply to continue in most areas
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Sydney Housing Market Prospects
–
–
–
–
–
–
–
–
–
Market recovery on track
Bottom to middle price sectors active
Tight rental market
Chronic housing shortages
Upper market to remain quiet
Western suburbs growing demand
Moderating economic performance
Early signs of increased FHB and investor activity
Price growth up to 3 percent for 2011
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Sydney Suburban Markets
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Sydney Regional Markets
–
–
–
–
–
–
–
–
Sydney western suburban regions popularity rising
Largest increase in sales of all regions over past 6 months
Sydney West up by 71 percent
South-West up by 64 percent
Sydney Inner-West popularity fell by 2 percent
Western regions best value
Sydney South-West average price $496,921
Sydney West $525,344
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Sydney Regions – 6 Monthly Sales Growth
80%
71%
70%
64%
60%
60%
50%
43%
40%
28%
30%
25%
24%
20%
14%
10%
0%
-10%
West
South West
Northern
Beaches
Upper North
Shore
Canterbury
Bankstown
Lower North
South
City and East
-2%
Inner West
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Sydney Regions – Average Sale Price 6 Months to June 30 2011
$3,500,000
$2,862,588
$3,000,000
$2,500,000
$2,182,869
$2,000,000
$1,596,753
$1,500,000
$902,774
$1,000,000
$496,921
$525,344
$594,721
South West
West
Canterbury
Bankstown
$1,033,398
$1,104,249
Upper North
Shore
Inner West
$500,000
$0
South
Northern
Beaches
Lower North City and East
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Sydney Western Suburbs Popularity
– Blacktown remains the most popular western suburb followed by
Kellyville and Quakers Hill
– Mount Annan, Ingleburn and Prestons are the most popular
South-West suburbs
– Strathfield is Sydney’s most popular Inner-West suburb followed
by Leichardt and Earlwood
– Kellyville and Kellyville Ridge are recording high levels of sales
growth with current medians of $699,000 and $646,000
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Sydney’s West – Most Popular Suburbs
600
548
500
429
389
400
300
199
200
198
185
124
122
109
100
0
Blacktown
Kellyville
Quakers Hill
Mount Annan
Ingleburn
Prestons
Strathfield
Leichhardt
Earlwood
West
West
West
South West
South West
South West
Inner West
Inner West
Inner West
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Sydney’s West – Most Popular Suburbs Median House Prices
$1,400,000
$1,277,000
$1,200,000
$1,000,000
$850,000
$839,000
$800,000
$646,500
$600,000
$400,000
$434,800
$379,950
$499,000
$460,000
$339,475
$200,000
$0
Blacktown
Kellyville
West
West
Quakers Hill Mount Annan
West
South West
Ingleburn
Prestons
Strathfield
Leichhardt
Earlwood
South West
South West
Inner West
Inner West
Inner West
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Sydney Western Suburbs Popularity Set to Continue
– Sydney affordability barriers set intensify due to housing
shortage
– Will remain Australia’s most expensive city for housing
– Buyers seeking value in the below $1million price range
– Close to transport – freeway, train
– Adequate amenities and facilities – schools, hospitals, cafes,
shops etc
– Pockets remain in Inner-West but going fast
– Burgeoning growth in outer north-west, Mac-mansion
communities – local lifestyle versus access to CBD
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Sydney –The Gold Standard for Australian Property
– Chronic housing shortages, population growth and a resilient
economy together with the magnetism of the Harbour and its
world-class attractions all underpin the investment security of
Sydney real-estate.
– Despite the cyclical ebbs and flows of housing market activity
Sydney remains the gold standard for Australian property.
– The west of Sydney currently offers investment opportunities as
buyers seek to maximise their value in a restricted market
characterised by high underlying demand and restricted supply
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Australian Housing Market Analysis
• If you require any further information regarding
Australian housing market analysis I may be contacted
by email at andrewwilson@apm.com.au or phone 02
8596 4580
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