Category: Homes

NSW Housing Affordability

NSW Housing Affordability

Housing affordability has been a real problem in New South Wales, like a lot of places elsewhere in Australia; is it likely to get any easier in 2018? We explore the possibilities.

Sydney second least affordable housing market in the world

News.com.au reports that Sydney remains second least affordable housing market in the world:

SYDNEY has held its status as the world’s most unaffordable housing market behind only Hong Kong, despite recent falls in prices.

An annual study of the housing markets in more than 400 cities across the world classified Harbour City real estate as “severely unaffordable”, with home prices requiring a greater share of residents’ income than in London, Los Angeles, Tokyo or New York.

A Sydney home priced at the city’s median of about $1 million is almost 13 times the typical household’s annual income, according to the annual Demographia International Housing Affordability Survey.

World’s Least Affordable Housing Markets

  1. Hong Kong, China
  2. Sydney, Australia
  3. Vancouver, Canada
  4. Santa Cruz, USA
  5. San Jose, USA
  6. Melbourne, Australia
  7. Santa Barbara, USA
  8. Los Angeles, USA
  9. Honolulu, USA
  10. San Francisco, USA

Source: News.com.au

Sea change or Tree change

With Sydney prices being so expensive, home buyers are looking towards other parts of New South Wales for their first home or next home.

According to recent research, the median house price in parts of the South Coast and Illawarra are more affordable than their Sydney counterparts.

 LOCATION  MEDIAN PRICE
(JULY 2015-JULY 2016)
 MEDIAN PRICE
(JULY 2016-JULY 2017)
CHANGE
 Shell Cove  $709,816.00 $830,000 ↑ 14.48%
 Shellharbour  $643,733.60 $808,000 ↑ 20.33%
 Flinders  $600,100.00 $680,000  ↑ 11.75%
Wollongong $693,334.50  $821,000  ↑ 15.55%
 Worrigee $399,712.50 $475,000  ↑ 15.85%
 Nowra $302,412.00 $395,000 ↑ 23.44%
National Average $464,145.00 $485,000 ↑ 4.30%

Source: Mincove Homes

Interestingly the median house price in Nowra fell below the National Average of $485,000.

Some sea change / tree change considerations

Of course packing up your whole life and relocating to another, cheaper, part of the state is more easily said than done. If you are going to do it, you will need to make sure it is really right for you. Here are some things we think you should consider:

  • Stage of life: Your stage of life will have important implications when it comes to moving from the city to the bush or the coast. Retirees will have different needs to young professionals, for example. While you might enjoy the lifestyle of a quieter location, it is important to see what your career prospects will look like in this new location. Older Australians might need to think about their location in relation to health care and other services.
  • Employment prospects: Will your skill set translate into a new location? What are the trends around your industry in this location? What is the employment rate more generally? Some regional areas can have staggering unemployment rates.
  • Distance of family and friends: One person’s peace and quiet can be another person’s sense of isolation. It is important to think about where your friends and family will be in relation to your new home and how easy or difficult it will be to visit them and stay in touch.
  • Public transport: Think about this in relation to getting around town, but also getting back to the city when the need arises. What options are available?
  • Cost of Living Expenses: Prices are likely to vary compared to city living, some things will likely be cheaper, but others may be more expensive (especially in terms of things like freight).
  • Becoming part of the community: It is probably worth spending some time in the area ahead of your move, to get a sense of the area and its people. Talk to locals, join community groups and get a feeling for what the place is really like.
  • Investment and growth: Is the area growing or is it stagnant? Are there new buildings being constructed, new industries moving into the area? Depending on your own situation and preferences you may prefer a quieter area or something with more economic vibrancy.