Percent Median Difference Between Capitals

Evening all,

Hope everyone enjoyed their weekend.

I've been thinking these days about historical difference in median house prices between capitals. Would anyone have the data or be able to point to the source?

I've heard that the difference in medians between Sydney and Melbourne has actually never been higher. To me that would indicate that there is more room for growth in Melbourne if these data are of any use.

Thanks a lot!

 

Probably the best reference I have found. They all go up, no one is a better bet than another despite opinion otherwise. The difference in price as a percentage tends to revert to long term trend.

 

Haven't got it in a graph but got it from here:

 

Thanks a lot @Scott No Mates and @HUGH72.

Here is the percent median difference (from your data) between Sydney and Melbourne from 2000-2015:

2000: 33%
2001: 34%
2002: 35%
2003: 39%
2004: 39%
2005: 36%
2006: 33%
2007: 26%
2008: 18%
2009: 18%
2010: 10%
2011: 12%
2012: 17%
2013: 21%
2014: 25%
2015: 30%

Currently the median difference between Sydney and Melbourne is the highest it's been in the last 10 years. The median difference varied between 10-40% from 2000-2016. The last time the difference was so high was in 2004 (40%) and at that point Sydney house prices were stagnating over the next 5 years (until 2010) while Melbourne was quickly catching up. In 2010 the difference narrowed down to only 10%.

If we extrapolate the data using the analogy, Melbourne will still be growing over the next years until the median difference between the two capitals narrows down. And that's of course if the history repeats, which I hope it will

 

The difference between medians in Sydney and pretty much every other capital city have not been higher

 

Hey mate, please see the above table. The percent difference between Sydney and Melbourne is highest it's been in the last 10 years.

 

Shows Sydney was a great buying opportunity in 2010/11.

 

Yes. But it also shows that Melbourne is still a good market to buy in. The difference is too big.

 

So what pushes up Melbourne prices?

Is it that people think, ' Sydney is way too much, so I'll buy in Melbourne '.

 

I've also included Brisbane and Perth, please see the attached table.

It seems like a pretty standard pattern across the capitals. When the gap in prices between Sidney and other capitals becomes large enough, Sydney slows down and other capitals ramp up until this gap narrows down.

If these patterns are to be repeated again, Brisbane and Perth are dormant animals And there is still steam left in Melbourne. What I also found interesting is that the average yearly growth over 2000-2015 was around 9% for all for capitals.

 

Might be brisbanes turn? Last time it was half Sydney's median was early 2000's it grew a bit after that point

 

However.... Sydney has had a lot of blocks becoming smaller, houses being knocked down for apartments, and this city is expanding outwards and upwards. So perhaps 20 years ago a median Sydney home was 15km out from the city on a 750 sqm block, now it might buy you a home 20km out on a sub 500 sqm block.

So while the differences in prices between cities might seem to grow similarly on the surface, you can't buy the same kind of home in Sydney for the median price as you would have been able to buy in the past. You can't clearly see in the stats that many Sydney homeowners had their homes bought off them because developers could turn their land into apartments. Long term, this will continue.

Perhaps a study showing the annual land value per sqm within say 5km, 10km, 20km, 30km and beyond 30km will tell a very different story. Then do this for all cities. At least doing it this way you will compare apples with apples.

 

Hey @HUGH72 and @Scott No Mates ,

I've noticed that the data in the two tables differ a lot for the years 2000-2003. Maybe one of them is showing inflation adjusted medians?

I just thought it would be interesting to do the same analysis for a larger timeframe, say last 30 years, to see whether the pattern consistently repeats. However it's a bit hard to do that from these stats.

 

I noticed this many years ago when I was in Brisbane - prices were quite low but when compared to inner Sydney it wasn't the case. Small inner-city blocks were almost as expensive.

 

partly..partly not.
Whilst there are a segment ( even on this forum) who think sydney and mel are the only two 'investment grade' cities in the entire country, there are many more factors that contribute strongly to melbournes rise- the economy and jobs being the most dominant from the demand side. Supply of new stock is not a low as sydney, but much lower than brisbane; especially in the more desirable areas eg inner east.