Sydney house price is predicted to skyrocket by $216,000 this year alone.?? Is it possible?

Can see Sydney have such a high price increase?





In grim news for first home buyers, the average Sydney house price is predicted to skyrocket by $216,000 this year alone.

Across Australia’s five capital cities, the average home values have already increased by 10 per cent between January and May, according to CoreLogic figures.

Yet a group of 40 experts and economists believe further price hikes are still to come with Sydney and Perth expected to see the biggest gains.

Economists are forecasting an 8 per cent increase in property values over the next seven months, according to the survey run by comparison website Finder.

Applying this forecast to the current price hikes means Sydney prices would increase by an unprecedented 21 per cent this year, adding $216,300 in value to the average Sydney property, it found.


Sydney house prices to increase by $216,300 in 2021 (news.com.au)


“The current average salary is around $92,034, so if our experts’ predictions are correct, the average Sydney homeowner will earn more than double the annual wage this year – equivalent to a fifth of the average property value through 2021,” he said.

 

I definitely think it’s possible. Properties around me are going for stupidly high amounts.

 

Its getting expensive.

I expected other cities to start accelerating faster than Sydney.

Although i feel employment, Favorable tax structure in the state is giving Sydney a boost .

 

Corelogic Rp Data city median prices are IMO inaccurate, I say this as Domain according to there methodology Sydney is $1,309,000. With that said and using that it would take us to $1,583,890 or 17.2 times income, not 11.2 times income! Not Bedhhhh Good Soizeeeeee

 

Article claims Sydney home prices will grow 21% cumulatively from Jan to Dec ..

Newsflash: Sydney house prices are already 30% up since last year. Corelogic hasn’t caught up with increases!

 

I actually agree.
i wonder if the aggressive uptrend im seeing on Core logic is part a reflection of the lag?





Last 2/3 weeks for Syd the upturn was very pronounced.

 

More Sydney prices sky-rocketing is music to my ears. I hope it plays out that way. No complaints here.

 

No ideas what people get paid in Sydney.

Talking to two RE in Perth the market is slowing in the $600k range due to serviceability issues.

Maybe the higher end of the market will grow in Sydney. The working middle might be governed by what the average family can pay.

 

Anyone can buy property in Sydney. That’s why! I remember in another thread someone was asking what needed to be beware of if bringing cash to Australia to buy property. You don’t need to get paid to buy property.

 

Interesting that the chart is all dwellings. Apartments are lowering the % free standing houses in the right suburbs likely 3 to 4 times the growth shown in those stats.

The fun starts when borders open again and prices of 1 and 2 bedroom apartments regain lost growth. Big gamble on building quality and strata issues but I believe now is the time to buy

 

The lag is always true. The Hedonic index is a great measurement tool and best in market indicator because it compares to what the market value should be vs actual sales (vs just price change).

Given that Sydney prices already up that level, the MoM change is very very fast and it is adjusting very quickly.

 

@Redom
So you think it is accurate that Sydney is still rising as fast as we are seeing.

Im keeping an eye as we are looking to let 1 go this months.

I saw a huge acceleration in Sydney this months.
SMH is now reporting the same thing.


Australian house prices reach another record level from interest rates, improving economy (smh.com.au)

 

Yes the market has moved again in the past 30 days IMO. Had a big big move in Jan/Feb too. Market has absorbed the increase in listings (seasonal) that has come about post Easter and performed strongly. It will likely continue for a while yet.

At this rate though, the same financial metrics that made Sydney a very big green light, will soon turn orange. I.e. affordability turns quickly when fixed rates creep up 20-50bps, and prices are up 30% in a year.

It will happen quicker than expected, largely because the rise predicted over 2-3 years this cycle has come about much much faster (and IMO potential of rate rises before 2024 increases as the economy continues to fire).

 

Hi Redom, Do you mean that for the current condition (supply/demand, QE, interest rate ...) the equilibrium will be 1.5 mil median for example. as it has reaching there earlier, it won't be much left to increase in the remaining years?

 

This is data from RealEstate.com.au. The hedonic index is known to be a little slow.

 

Sydney is running crazy at the moment because it is highly responsive to affordability and interest rates, more so than other cities. Melbourne is very close too, but has been punctuated a bit by Covid lockdowns (catchup to Sydney will occur unless there's a structural change post Covid).

The numbers are just very compelling for anyone in the market.

But that is slowly changing.

From the base post Covid, ramp up prices 30%, and increase fixed rates back to the current variable rate setting. Add in 2 rate rises (minor adjustment), a year or 18 months earlier than forecast, and then your back to a point where the 'rent or buy' equation no longer spits out a very obvious 'BUY' signal.

Thats when we'll be approaching an actual peak point in price trajectory. From there, there's a material 'run off' of fixed rates that'll occur in 2023-2024 given all new origination is nearly 50% fixed now (i.e. a repayment increase).

It was significantly undervalued. That is changing, fast, because prices are adjusting quickly.

This is just the debt cycle ebbing and flowing, with adjustments in parameters (rates, prices, affordability benchmarks).

The price rise won't continue into the distance. The numbers don't allow it expand indefinitely. Trigger points impacting market are if fixed rates normalise (beginning) and variable rates creep back close to 3 (likely a year or three away).

 

My gosh... any growth more than say 3% is pretty good...
Units are not going anywhere atm.

 

Epping is very strong!!!!
Congratulations.

Hobart & Darwin is another stand out.



Im now just curious if Sydney can catch Brisbane for the yearly growth.
50% ahead on QoQ

Catching up daily to the YoY

 

This is an interesting drive showing the divergence between Sydney and Melbourne the first one that’s interesting news after the 90s recession Sydney every bounce a lot quicker also after the gfc again Sydney rebounds quicker

 

Sydney is closing in now

Galloping as well