It is now “virtually impossible” for the average Sydney family to afford the average Sydney home.
According to Onthehouse data, Sydney experienced one of its largest booms on record in 2014, with house prices rising 16.8 per cent and unit prices rising 12.9 per cent.
Consulting analyst John Edwards said last year’s price surge could even be regarded as more impressive than the 1989 boom, when prices jumped 36 per cent.
That’s because 2014 house price growth was $50,000 greater than in 1989, when adjusted for inflation, Mr Edwards said.
“In reality, price growth measured in percentage terms is relatively meaningless to ordinary Australians,” he said.
“It is the dollars in cost to buy and repay a mortgage that really matter, hence the importance of doing a comparison based on real dollars.”
Mr Edwards said the level of price growth in Sydney is a serious cause for concern.
“With the current median value of a house in Sydney now sitting at $900,500, this exorbitant figure makes it virtually impossible for the median income family to purchase the median value property,” he said.
“The stark reality is that Sydney is no longer an affordable place to buy and own a home if you are a first-time buyer.”
HSBC economists Paul Bloxham and Daniel Smith said earlier this month that “growth in Sydney housing prices is currently running at an unsustainable pace”.