Escalating dwelling values are making it more and more difficult for renters to move into home ownership, according to a leading property analyst.
Twenty years ago, 95.4% of capital city house sales were below $400,000, according to CoreLogic RP Data’s Property Pulse. Three percent of sales were between $400,000 and $600,000, 1.2% were between $600,000 and $1 million, and only 0.4% were over $1 million.
Fast forward to 2014 and just 22.2% of house sales were below $400,000, 33.4% were between $400,000 and $600,000, 28.1% between $600,000 and $1 million and a massive 16.2% were above $1 million.
In housing hot spot, Sydney, the $1 million to $2 million price bracket accounted for the greatest amount of sales – with almost a third of all house sales in 2014 (31.6%) over $1 million. In Melbourne, 15.7% of sales were over $1 million, compared to 10.7% in Perth and 5.5% in Brisbane.
CoreLogic RP Data research analyst Cameron Kusher says Australia’s escalating home values is making it increasingly difficult for renters to afford to buy.
“The sharp decline in sales below $400,000 over the past 20 years reflects the overall growth in household debt which is attributable to housing.
“It also highlights that a large proportion of Australian’s choose to build their wealth by investing in residential property. Of course, this is a good thing if you own a home but many Australian’s don’t. The sharp rise in home values leading to a decline in more affordable homes available for sale makes it more difficult for those renting to save up necessary deposits to enter in to home ownership,” he said.
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