Wage growth slows as Sydney house prices jump

Font size :
New CoreLogic data has revealed that house values in Australia's biggest city have jumped more than five times faster than wages in each of the past two years.

Bloomberg found (upon collecting information from CoreLogic) that wages in New South Wales went up 2.5% in 2013 and 2.4% in 2014, “compared to gains of 12.4% and 14.5% respectively for homes in Sydney. Sixty per cent of NSW’s population resides in Sydney.
 
However, the data also showed Sydney house and apartment prices have jumped 40% from May 2012. The report said this forced regulators to call on banks to strengthen lending standards and warn of the potential for values to drop.
 
The rise in property values comes as income growth among households “slows to the lowest on record, rental yields approach an all-time low in Sydney and Moody's Investors Service said housing affordability in the city has deteriorated”.
 
"When you compare home-price surges between early 2000s and now, this time income is static or lower in real terms," said Martin North, a Sydney-based principal at research agency Digital Finance Analytics, as quoted by The Australian Financial Review.
 
"With interest rates at rock bottom, the affordability is not extreme, but it can easily go very bad if rates normalise and add to that static or declining rents."
 
Meanwhile, Moody’s latest report released this week said Sydney households spent an average 35.1%of their income on mortgage repayments, up from 32.8% in 2014.
 
 

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Monday, Sep 25, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords