Byron’s Suffolk Park number 1 for value growth nationally
A landmark, joint study by Aussie Home Loans and CoreLogic has revealed Sydney house values have risen at an annualised rate of 7.6 per cent or $34,400 since 1993.
At the same rate of growth over the next 25 years, Sydney’s median house value could rise from today’s $1.03 million to reach $6,350,000 in 2043.
The Aussie/CoreLogic ’25 years of housing trends’ report found the typical Sydney apartment value increased at the annualised rate of $23,600 or 6.3 per cent a year, with the median value now $753,300. In 25 years, the median unit value in Sydney could be $3,472,000.
Chief Executive Officer of Aussie, Mr James Symond, said “Our report reveals that residential property in Sydney has shown strong growth across five cycles in the last quarter-century, and while prices are currently softening, I expect the growth trend will continue especially with high immigration levels.
“But it’s not just Sydney property making the big gains. Byron’s Suffolk Park topped the nation for value growth, with the median house price moving from just $74,250 25 years ago to $1,185,000 in 2018; an increase of 11.7% per annum. Coastal and lifestyle markets around the Hunter and Illawarra regions were also standouts, comprising four suburbs in the national Top 10.”
Interestingly, the percentage of annual household income in Sydney required to service a loan – at an 80 per cent loan to value ratio – has risen from 36.4 per cent to 49.3 per cent since 2001.
Mr Symond said “With average mortgage rates currently close to their record low levels of the 1960’s, loan serviceability levels have actually improved in recent years.
“However housing affordability remains a major issue for people in Sydney, largely driven by the dramatic housing price growth across the city in recent years. Buyers now need to dedicate 185 per cent of their annual gross household income to raise a 20 per cent deposit, with property worth a staggering 9.3 times annual household incomes,” he added.
Perhaps the greatest change in Sydney is its growth in higher density housing, with the share of apartment sales to all residential property sales growing from 30.4 per cent to 43.8 per cent in the last 25 years.
“I expect this trend to continue as the boom in apartment construction continues across Sydney, where a larger proportion of the population will seek to live closer to the CBD and transport corridors,” said Mr Symond.
The report also revealed the top 20 suburbs in Sydney for value growth over the last 25 years, with Camden’s Currans Hill the star performer.
Currans Hill has experienced extraordinary growth in its median house value from $53,000 to $655,000, followed by Clovelly which lifted its median house value from $273,000 to $3.3 million.
Detached houses have been the primary drivers of the market, with Sydney’s Top 20 listing featuring no suburbs dominated by apartments. Nationally, the top apartment suburb was Willoughby at 131st ranking, indicating land value has been a key driver of asset growth.
“Our report clearly shows that housing continues to grow as Australia’s largest asset class. If the changing face of residential property and staggering growth of technology we’ve seen over the last 25 years continues, it’s likely the next 25 years will produce even greater change,” concluded Mr Symond.
To view the full Aussie/CoreLogic 25 years of housing trends report, visit www.aussie.com.au/25years or contact an Aussie Broker for a free copy.