Sydney: Is Your House Earning More Than You?

News Corp, 4/8/2014 by Kirsten Craze

Property prices in some Sydney suburbs have skyrocketed by more than five times the annual household income in a year, making thousands of homes much higher earners than their residents.
While the greater Sydney house price median increased by $71,000 in a year, according to RP Data figures, the Australian Bureau of Statistics’ average full-time adult earnings report puts the Sydney’s household income at $77,923. But some specific pockets of the harbour city have had house price medians leap by as much as $600,000.

Chantal and Corey Snell, of Pagewood, were shocked to discover their suburb’s median house sale price had gone up $425,000 since this time last year — far more than their household income.
Pagewood’s median house price is now $1.38 million, up from $955,000 a year ago.
“If we earned that much between us then I’d have to say we’d be living in a much fancier house,” Mrs Snell said.
“But then I can understand the demand for the area. It’s a thriving neighbourhood.”
The pair have just listed their five-bedroom family home at 15 Collins St with a price guide of more than $1.2 million — far above the $32,000 Mr Snell’s parents paid for it back in 1977.
Their real estate agent, Darrin Agius of LJ Hooker Maroubra, said the median price hike was not surprising and high demand in the area could mean prices will continue to rise.

“The buyers are there, there’s still a lot of competition. People are confident, there is not enough stock out there and the rates are still really low,” he said. Mark McCrindle, of McCrindle Research, said since 1974 when house prices in Sydney were five times the annual salary, they have doubled to 10 times average earnings.
“We’ve been seeing this trend for a while — house prices rising faster than incomes. But now it’s really stepped up,” he said. Mr McCrindle said although such a spike in real estate prices has some commentators talking about a property “bubble” he said he firmly disagreed.
“These price rises are underpinned by demand, which is caused by record birthrates and rising migration. I think it’s about time that we decoupled average earnings from house prices,” he said.

The annual change in Sydney’s big earning suburbs:

Tennyson Pt — $600,000
Birchgrove — $474,800
North Sydney — $442,500
Roseville Chase — $440,000
Pagewood — $425,000
Ultimo — $420,000
Zetland — $419,000
Rhodes — $330,000
Waitara — $310,571
Marsfield — $303,000
Greater Sydney overall — $71,000

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