Australian Housing Market Values Surge
Synopsis
According to new CoreLogic data, the Australian Housing Market has seen a huge increase in the past five years. The average price of a home increased to 6.5 times the median income in 2020.…
According to new CoreLogic data, the Australian Housing Market has seen a huge increase in the past five years.
The average price of a home increased to 6.5 times the median income in 2020. It increased to again to 8.0 at the end of 2024. In percentage terms, these values are relatively low compared to the historical data. However, when put into dollar terms, the increase is far more extreme.
If the increase is adjusted to the current median value, the rise in price is a $230,000 increase, said Kaytlin Ezzy, A CoreLogic economist.
In the current economic environment, home ownership remains unattainable for many families.
Factors Behind the Australian Housing Market Surge
“The factors behind the rapid growth in values come back to underlying demand/supply imbalances as well as a long-term trend towards lower interest rates and household debt accrual,” according to CoreLogic’s research director, Tim Lawless.
Furthermore, housing values are rising disproportionately to incomes. In terms of the most expensive cities, Sydney ranked as the most unaffordable with a ratio of home values to incomes sitting at 9.8. Adelaide comes in second with a ratio of 9, and third most unaffordable market is Regional New South Wales with a ratio of 8.9. Darwin on the other hand, sits at the other end of the spectrum with a ratio of only 3.9.
Grattan Institute program director housing and economic security Brendan Coates said the increase in the Australian housing market values is linked to the shortcomings in supply of homes.
The increase in migration since the pandemic, coupled with this lack of housing, has pushed values up. The solution, he said, is simply to build more housing. The government currrently has a goal to build 1.2 million homes between 2024 and 2029.
What the Historical Data Shows
According to Sydney Morning Herald, “CoreLogic executive research director Tim Lawless said ABS data showed that over 20 years, wages had risen by 82 per cent, while the house price index exploded by 160 per cent.”
Since COVID, housing prices have surged 41 per cent, while wages have only increased around 14 per cent.
Sources:
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