New South Wales is continuing to drive the national property recovery.
Some commentators are continuing to argue that the Sydney market is experiencing boom times, with RP Data reporting capital growth at 16.7 per cent over the past 12 months. Prices have been pushed higher and higher with Residex now reporting the median is well above $800,000.
While existing owners in Sydney may be rejoicing, some observers have argued current conditions are spiralling out of control.
John Edwards from Residex believes Sydney is “moving into dangerous ground”. Based on the median household income, families buying at the median price would have to dedicate 52 per cent of their after-tax income to mortgage payments, Mr Edwards says. He warns that once this affordability index surpasses 50 per cent of median income, the market usually corrects.
Nonetheless, current trends suggest the market is still picking up speed. Sydney dominated an analysis by onthehouse.com.au of the fastest growing areas over the quarter, taking out seven of the top 10 spots.
Beaumont Hills came in at number one, with median prices increasing by 13.13 per cent over the past three months. With a median price of $866,000, this suburb is also the most affordable Sydney suburb on the list. For units, the north shore and northern beaches dominated the rankings, with Wollstonecraft, Milsons Point, North Sydney and Collaroy all showing rapid quarterly increases.
LJ Hooker predicted the federal government’s commitment to infrastructure projects in the Budget would boost values in western Sydney. In particular, the WestConnex project and the Badgerys Creek airport are expected to improve the desirability of these areas.
Country New South Wales is also recording some of the country’s strongest results. According to onthehouse.com.au, both Lawson and Katoomba out-stripped most capital cities over the quarter with growth at nine per cent and 8.58 per cent respectively.
While these areas have some of the state’s strongest economies, slowing coal exports and high developer activity may be undermining property values. In Singleton, the median price dropped by four per cent over the 12 months to February, while residential building approvals doubled over the past financial year, Mr Ryder warns.
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