Melbourne market outstripping Sydney despite new record median price
Article by Tom Watson
Sydney’s property market may just have hit another record high, with the median house price now roughly $1.18 million, but when it comes to growth the harbour city is well and truly lagging behind the Melbourne market.
New figures from Domain’s State of the Market Report for the June quarter show that while the median house price in the New South Wales capital increased by 1.6% in the last three months, it’s Melbourne’s housing market that continues to impress - with the median house price rising by 3.5% to $865,712.
In an interview with the Australian, CoreLogic’s Head of Research Cameron Kusher stated that while economic prospects remain relatively good in both cities, other factors are making Melbourne the more attractive option for buyers.
“Interstate migration in Victoria is continuing to go from strength to strength, while in NSW it’s starting to fade,” he said.
“But people are still choosing Melbourne because they think they still have a chance in the housing market, whereas they probably don’t feel like they have that chance in Sydney any more.”
Domain’s report showed that the yearly growth rate (June 2016-17) for houses in Melbourne also outpaced that of the harbourside city, hitting 15.1% compared to 12.7% for houses in Sydney.
The trend of slowing growth in the Sydney market compared to Melbourne comes just days after the HIA (Housing Industry Association) released its annual housing scorecard which ranked New South Wales and Victoria as the country’s top performing markets.
While New South Wales hung onto top spot for a second straight year, the scorecard indicated that growth in the Victorian market could help the state take out top spot in 2018.
In a surprise for the experts, data from the Domain report showed considerable growth in the Sydney apartment market - up 3.2% in the June quarter with the median price now over $750,000.
According to the Mozo mortgage repayment calculator, repayments on a $750,000 loan with the average interest rate currently in the Mozo database (4.37%) would cost a borrower $4,114 a month.
“It’s very surprising to see that sort of growth rate for units, especially given the crackdown from APRA in the last few months,” said Mozo’s Property Expert, Steve Jovcevski.
“While I’d expect the rate of growth for units in Sydney to continue, it’s unlikely to be at that same level though.”
If you’re looking to get into the housing market yourself you’ll be pleased to hear that interest rates have been moving in the right direction for owner-occupiers paying off both the principal and interest on their loans. So to help you on your way make sure you check out the Mozo home loan hub to compare over 500 different loans.