In Sydney, less than 50% of properties will be owner occupied in the future..

Ownership rates in Sydney are dropping faster than in the rest of Australia....

Seems we are going the way of many other overseas cities where ownership rates are typically low.

A few factors come to my mind:
1. Sydney properties are too expensive for the younger folks to get into the market in Sydney so they will be renters for longer periods... could be in normal rentals, share houses, or living with parents....

2. Another group who would fall in this group are new migrants arriving into Sydney. They typically don't start off owning property here, they usually rent for a few years. Migrants make up a fair proportion of Sydney's population.

3. But if you already own here then buying more in Sydney becomes a piece of cake (compared to anybody without) as you already have the equity. Owning a few here isn't difficult if you are already in the market... if you don't care too much about rental yields that really helps.

There must be some other factors too...

Article here: Sydney turns its back on the great Australian dream

 

Hope the home ownership rates don't drop too far in Sydney as that might be a catalyst for future government market intervention.
If no one can afford anything it will lead to changes to NG, CG Tax and even investor LVRs.

I think when OOs make up a fair majority of the market it helps to stabilise it from any wild investor lead fluctuations.

A few years of stability and not too much happening may actually be a positive long term as wages, inflation and time does its thing.
Removing the property market from the any political thought bubble would be great.

 

You think if this was to happen then Government might intervene and allow OOs an advantage in Sydney's market? Ohhh.. we definitely can't allow that!

I do see and understand your point though.

I tend to think Investors and Owners won't leave Sydney in droves. Unlike mining towns, Sydney's economy is too diverse. If Australia's economy goes to s#it, I still think Melbourne and Sydney will be the safest places to be.

Sydney could be considered a safe haven... sell all other assets before contemplating selling the Sydney ones.

 

Restricting investor LVRs? I don't know if this is a possibility?

No one will be leaving that market, way too much demand and at least for houses, insufficient supply.
It will always be priced at a premium compared to other cities including Melbourne but if many of it's residents cannot afford anything then it remains a political headline.

I hope politicians will leave the market alone as it could have negative consequences for all investors.

 

I heard on telly this morning. Is this confined to Sydney only? Maybe I should consider buying an apartment in Sydney.

 

But... choose house on land! (Bloody exxy though)....
I think Blacktown 600k freestanding house buy-in seems cheap/good value these days....


Please note: This is not investment advice and DYODD

 

I'm not that brave jumping into Western Sydney market. Central Coast is going great atm. Will it ever be part of Sydney, Upper Sydney?

 

This shouldn't surprise people who have lived in Asia.

Let's take Mumbai for an example:

Land prices became so expensive that people could only inherit property. Buying a property with land component in Mumbai (specially in 20km radius of business districts) now requires you to have extreme wealth. People who inherited property there also became extremely rich.

A good 90%+ people rent all their life and have no hope/plans to buy house. There's some recent boom in property ownership but that's only restricted to apartments.

Sydney existed in utopian world of 'everyone should own their house' for far too long but things are changing very rapidly here to mimick conditions elsewhere in the Asia.

 

A couple I know had convinced themselves that they couldn't buy because they had read too many "Sydney is unaffordable" news headlines. Without any research they took it that they would be buying a house for about $800k-1m and would need to stump up 20% deposit. Quick and easy 5min conversation to enlighten them on the reality of expectations and what they could do and they're off house hunting with glee!

I've heard similar stories from other friends who assumed they couldn't buy without even seeing an MB They wanted within 10km of the CBD and of course maintain the lifestyle with Foxtel and 6hrs at the craft brewery on Friday night.

We're also adding hundreds of thousands of migrants who would be on visa and legally unable to buy so they're counted into those stats too when they really shouldn't be.

 

There are fewer of those available every day.

 

It'd be interesting to know the numbers of people in Sydney moving to Melbourne and other states solely on housing affordability.

 

The transport Central Coast to Sydney is a killer for me long term. It wont ever be properly considered as Sydney as there's too many natural barriers in the way. It's not a place I'd recommend if something can be bought around Blacktown for the same price.

Blacktown is well located, shops, roads, trains, access to hospitals, unis, near Parramatta. Given the outer Hills District typically sells for about 900k, Blacktown is good value for so much amenity...

 

I think lifestyle choice makes a difference. Sure there are amenities, but a long to the beaches.

 

Holy moly, thanks for sharing @standtall

 

I think @standtall gave valid reasons as to why Sydney is moving that way. Scarcity of land which encourages more high rises. Apartment living will be a norm and like those in HKG, owning a detached house with land is out of the question for most people in the next generation.

 

For the majority... jobs trumps beaches.
Jobs are "must haves".... beaches are "nice to haves"

 

It is not only in Sydney where home ownership is falling.

Here is the link to the latest Household, Income and Labour Dynamics in Australia Survey (HIILDA) report, completed by the University of Melbourne Statistical Report: Melbourne Institute of Applied Economic and Social Research: The University of Melbourne

Home ownership statistics are shown for all States from 2001 to 2014...go to Chapter 6 Housing Wealth, page 67 onwards.

 

the precise reason why west and south west market in Sydney is too different than the inner west and eastern

 

I'm sure there are jobs in CC just not as many. People prefer beaches than jobs. Hehe.

but seriously, some may prefer to earn less and live somewhere more affordable. How much rent comes out of a paycheck for those who live close to CBD? What percentage? Maybe less compared to those live outside Sydney metro? Comments from those who live in CC or the Gong would be great.

 

Blacktown is a next big thing IMO... Very well located and aggressive council. Hopefully the rising prices will improve the demographics and then it could be next parramatta.