Sydney has once again found itself in the unenviable position of being the second least affordable city in the world, according to a new report.
The latest Demographia International Housing Affordability report found that the NSW capital has held onto its ranking for a second year running, with Hong Kong taking out the dubious top spot. Meanwhile, Melbourne also made an appearance in the top 10, securing ninth place.
The report highlights the significant affordability issues facing Sydneysiders. The city’s median house price is a staggering $1.2 million, which is a whopping 13 times the average full-time salary of $94,000, and that’s before a mortgage deposit is factored in. It’s little wonder that Australians have some of the highest household debt levels in the world.
Despite a 14.7% drop in median house prices over the past year, prices rose by a staggering 27.7% during the pandemic, which is far higher than the 3.3% increase in wages.
CoreLogic and Australian Bureau of Statistics data revealed that, at the peak of the boom, when Reserve Bank interest rates were at a record low of 0.1%, house prices in some suburbs soared higher than the 7.8% inflation rate, otherwise known as the consumer price index.
“Sydney prices increased 6.0 times the CPI, Brisbane 5.2 times, Melbourne 4.9 times and Perth 4.2 times,” part of the report read.
“In each of these five housing markets, the house price inflation since 2000 exceeded that of all of the product groups constituting the CPI.”
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Rising prices may cause a significant drop in living standards, according to the report’s cautionary message.
“As pandemic and lockdowns continued into another year, the movement of households from denser urban neighbourhoods to larger homes, often with large yards (gardens) in suburban and outlying areas, has continued,” the report continued.
“The result has been to drive up prices at unprecedented rates in many markets.
“As a result, many low-income and middle-income households who already have suffered the worst consequences from housing inflation will see their standards of living further decline.”
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The writer used AI tools to publish part of this article. The Brag Media relies on journalists to fact check & edit all articles regardless of any AI tools used.