Homeowners turn asset rich as gains in property values outpace wages

By Gerv Tacadena

Properties in a third of suburbs have outpaced annual wages in property price growth, according to new data from Domain.

Properties in a third of suburbs have outpaced annual wages in property price growth, according to new data from Domain.

According to the report, 95% of Australian suburbs have clocked annual gains in house prices over the year to June 2021. Of these suburbs. 33% recorded gains that were more than the annual household income.

Domain senior research analyst Dr Nicola Powell said the phenomenon has made homeowners wealthier, given their assets have grown in value.

"It is this wealth effect that has underpinned the stronger than anticipated economic recovery prior to the current Delta outbreak," Dr Powell said.

New South Wales reported the highest share of suburbs where property price gains have outpaced wages at 55%.

The state also accounted for 18 of the 20 suburbs nationally where price gains outpaced income.

Dr Powell said the top 20 suburbs reflect the ongoing demand for homes in cities and in lifestyle coastal pockets.

"This is evident in the flow of residents from our capitals and into regional lifestyle locations, as well as keyword searches placing importance on particular home amenities or luxury additions that boost our lifestyles and how we use our homes — such as a pool and study.”

Taking the top spot was Sydney’s exclusive Dover Heights. Over the year, the median value of homes in the suburb increased by a whopping $1.27m.

This was more than seven times higher than the annual household income at $174,491.

Dover Heights is just one of the 13 suburbs in the list where prices have gone up five times the annual household income.

Top 20 Suburbs where annual house price growth exceeded household income, by dollar difference

State
Suburb Postcode Region Annual change in house price Estimated annual household income How much more your home increased compared to your income.
NSW Dover Heights 2030 City and East $1,265,000 $174,491 $1,090,509
NSW Bronte 2024 City and East $1,220,000 $153,767 $1,066,233
NSW Northbridge 2063 Lower North $1,050,000 $192,510 $857,490
NSW Seaforth 2092 Northern Beaches $925,000 $194,813 $730,187
NSW Mosman 2088 Lower North $875,000 $145,189 $729,811
NSW Bellevue Hill 2023 City and East $850,000 $166,489 $683,511
VIC Somers 3927 Mornington Peninsula $731,750 $85,175 $646,575
NSW Manly 2095 Northern Beaches $786,000 $140,986 $645,014
NSW Palm Beach 2108 Northern Beaches $762,500 $121,528 $640,972
NSW Byron Bay 2481 NSW Country $655,000 $68,910 $586,090
NSW Gordon 2072 Upper North Shore $600,000 $133,157 $466,843
NSW Killara 2071 Upper North Shore $612,500 $145,880 $466,620
NSW Naremburn 2065 Lower North $585,000 $151,234 $433,766
NSW Avalon Beach 2107 Northern Beaches $545,000 $123,025 $421,975
VIC Blairgowrie 3942 Mornington Peninsula $469,500 $61,502 $407,998
NSW Pymble 2073 Upper North Shore $576,500 $177,888 $398,612
NSW North Balgowlah 2093 Northern Beaches $565,000 $179,557 $385,443
NSW Bilgola Plateau 2107 Northern Beaches $520,000 $138,108 $381,892
NSW Maroubra 2035 City and East $479,400 $99,134 $380,266
NSW Cremorne 2090 Lower North $514,000 $135,172 $378,828

Data provided by domain

The story was different with units, where price gains did not match those of houses.

In fact, of the 67% of suburbs that experienced growth in unit prices, only 10% witnessed gains overtake the annual household income.

"This reflects the underperformance of units, as national house prices have grown almost three times faster than units over the past year," Dr Powell said.

Queensland had the highest share of suburbs with unit gains that were higher than household wages at 13%.

However, New South Wales still dominated the top 20 suburbs for units, with Milsons Point claiming the top rank.

Over the year, the median price of units at Milsons Point have grown by $508,500, close to three times higher than the annual household income of $178,867.

Top 20 Suburbs where unit prices exceeded household income, by dollar difference

State
Suburb Postcode Region Annual change in unit price Estimated annual household income How much more your home increased compared to your income
NSW Milsons Point 2061 Lower North $508,500 $178,867 $329,633
NSW Little Bay 2036 City and East $351,500 $117,498 $234,002
NSW Fairlight 2094 Northern Beaches $299,000 $150,831 $148,169
QLD Sunshine Beach 4567 Sunshine Coast $212,500 $77,067 $135,433
NSW Darling Point 2027 City and East $295,000 $170,749 $124,251
NSW Rose Bay 2029 City and East $250,000 $130,797 $119,203
NSW Double Bay 2028 City and East $260,000 $142,656 $117,344
NSW Woolloomooloo 2011 City and East $213,000 $103,279 $109,721
QLD Coolum Beach 4573 Sunshine Coast $181,000 $72,984 $108,016
NSW Kingscliff 2487 NSW Country $176,000 $70,810 $105,190
NSW Terrigal 2260 Central Coast $200,000 $96,658 $103,342
NSW Queenscliff 2096 Northern Beaches $233,500 $135,172 $98,328
NSW Yamba 2464 NSW Country $146,250 $50,258 $95,992
NSW Narrabeen 2101 Northern Beaches $181,500 $91,074 $90,426
VIC Blackburn 3130 Outer East $194,300 $104,380 $89,920
VIC Geelong 3220 Geelong $162,500 $82,796 $79,704
QLD Noosaville 4566 Sunshine Coast $132,000 $66,255 $65,745
QLD Buddina 4575 Sunshine Coast $145,000 $79,540 $65,460
QLD Golden Beach 4551 Sunshine Coast $108,000 $58,145 $49,855
QLD Mooloolaba 4557 Sunshine Coast $118,000 $68,555 $49,445

Data provided by domain

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