Sydney Housing Market Projected to Become Renter's Paradise
A renowned housing analyst warned that Sydney's housing market would start to look like the New York market. According to a report from Domain, Sydney would become a market where renting a home would become the norm as prices to purchase a home would become well-beyond the means of an average Sydney resident.
The observation came from Domain Group Chief Economist Andrew Wilson in a seminar last Thursday. He said that house and unit prices in Sydney were so high that 'very little could be done to make the city affordable to first-home buyers'. He further added that this situation would worsen as the demand for housing would increase further in the coming years.
He remarked during the symposium, "The boom has entrenched significant barriers of entry to the market and fast-tracked the rise of Sydney as the high-rise and renting capital, we're moving inexorably towards that outcome."
While this was Dr. Wilson's observations, home prices for Sydney dipped slightly for the first time in four years. According to a report from ABC.net, prices rose by just 0.2 percent for the last quarter of 2015. This slight increase was lower than the annual increase of 8.7 percent, the first decline in growth since March of 2012.
This slight decline though needs to be contextualized of the market performance in the past quarters, according to JP Morgan analyst Tom Kennedy. He said, "The monthly house price data indicates Sydney dwelling price growth has continued to cool in the first quarter, a theme we expect to persist this year."
He added that the decline was consistent with the idea that market growth dissipated to some degree in late 2015. He said that the 2015 fourth quarter growth rate was the slowest on record for Sydney. His assertion was backed up by figures obtained by CoreLogic RP Data for February.