Sydney property boom: median house price approaches $1.2m after $40k rise in one month
Sydney property prices ballooned again over May, surpassing rises in every capital, and the market is now approaching a once unthinkable milestone.
Another explosion in property prices has meant home seekers will have to pay an average of nearly $1.2 million to purchase a Sydney house, while unit buyers will have to pay nearly $800,000.
CoreLogic’s home value index released Tuesday showed prices for all categories of housing ballooned three per cent for the month – one of the largest monthly rises on record.
It came on the back of incredible growth earlier this year, which has meant a typical Sydney house is now about $117,000 pricier than it was at the end of February. Close to $40,000 of that increase was from May growth alone.
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Unit increases were not as significant – apartment values grew by about half the rate of house prices.
The median price of a house is now $1.186 million, while the median unit price is $782,000, according to CoreLogic.
CoreLogic head of research Tim Lawless said the median house price would likely hit the $1.2 million mark soon – even as early as next month. “It wouldn’t take much growth, it’s nearly there,” he said.
May’s bump in prices was a modest slowdown from March, when values climbed at the fastest pace in 32 years, but the growth still dwarfed price rises across the rest of the country.
Sydney’s price rise was 66 per cent higher than in Melbourne and about 36 per cent higher than the national average.
Mr Lawless said he expected rises to moderate over the coming months as buyers became priced out of the market. “It will reach a point where fewer buyers can compete,” he said.
Housing supply was also beginning to increase in many suburbs and a further increase would take pressure off of buyers to bid up prices. A shortage of listings had been one of the biggest drivers of the recent price boom, Mr Lawless said.
Sydney prices ballooning at a much faster pace than other capitals, despite already being the highest in the country, could be explained by a high incidence of upsizing, he added.
“Many buyers will have equity behind them and that’s how the prices have been able to increase as much as they have … first homebuyer activity is starting to drop,” Mr Lawless said.
Parents helping their children get into the market with the equity in their own homes was also a factor. “There would be many buyers relying on the bank of mum and dad,” Mr Lawless said, adding some of the money flowing through the market may even be coming from overseas.
My Housing Market economist Andrew Wilson said the only buyers who could compete in the current market already had a “trade in”.
“Prices are increasing too quickly, you can’t save that fast,” he said. “You need to already own or you can’t compete.”
Originally published as Sydney property boom: median house price approaches $1.2m after $40k rise in one month