Deterioration of affordable housing across the capital cities in Australia

According to the CoreLogic latest research, by Cameron Kusher, the median dwelling values across the suburbs of Australia shows the bracket creep that has occurred over the current growth cycle, highlighting the deterioration of more affordable housing across the capital cities over the past five years.

At the end of 2016, 7.6% of suburbs nationally had a median house value under $200,000 and 5.9% of suburbs had a median unit value below $200,000.  To put these figures into some perspective, 11.4% of suburbs had a median house value of at least $1 million and 3.0% of suburbs had a median unit value of at least $1 million.

Over the five years to the end of 2016, there has been a substantial decline in the proportion of suburbs with a median value below $400,000.  At the end of 2011, 53.5% of suburbs had a median house value of less than $400,000 and 69.8% of suburbs had a median unit value of less than $400,000.  By the end of 2016, the proportion of suburbs with a median value of less than $400,000 had fallen to 41.0% for houses and 55.3% for units.

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A five year retrospective look at the individual capital cities highlights the significant shift in the proportion of suburbs with a median value under $400,000, particularly in Sydney and Melbourne.

In 2011, the proportion of total suburbs with a median house value below $400,000 across each capital city was: 21.2% in Sydney, 28.9% in Melbourne, 40.9% in Brisbane, 40.5% in Adelaide, 31.1% in Perth, 69.2% in Hobart, 2.1% in Darwin and 1.1% in Canberra.  Units offer a more affordable option highlighted by the proportions of suburbs values below $400,000 at: 38.8% in Sydney, 48.2% in Melbourne, 81.7% in Brisbane, 94.3% in Adelaide, 59.8% in Perth, 92.7% in Hobart, 53.3% in Darwin and 44.6% in Canberra.

At the end of 2016, looking at both houses and units, 20.5% of Sydney suburbs had a median value of less than $600,000 compared to 38.5% of suburbs having a median value of at least $1 million.  To further highlight deteriorating housing affordability in Sydney, 34.6% of suburbs had a median unit value of less than $600,000 at the end of 2016.  In each other capital city, a higher proportion of suburbs had a median house value of less than $600,000 than the proportion of suburbs with a median unit value of less than $600,000.

If you are earning a relatively low income in Sydney and are looking to buy a house or unit, you are competing for a rapidly declining pool of housing stock across the city.  The pool is also declining across the remaining capitals, albeit not at the same pace of decline as in Sydney.

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