The theory that Sydney’s high-priced housing market is balanced by higher average wages is bollox, says RP Data senior research manager, Cameron Kusher.
In an editorial piece released earlier this week, Kusher compares property prices to average income in the major centres, demonstrating that average wage has little to do with house prices - and vice-a-versa.
His findings show that the only capital city where the comparison of incomes and dwelling prices is roughly equatable to Sydney's is in Melbourne, where incomes are roughly 9% lower than Australia's largest urban centre and dwelling prices are about 11% lower.
In Brisbane, however, incomes are 9% lower than Sydney’s, while dwelling prices are nearly 25% lower – and in Adelaide, dwelling prices are 30% lower, while wages are tracking 17% lower.
Average wages/salaries across Perth are only 1% lower than Sydney’s, but median dwelling prices are almost 13% lower - and the gap between Sydney and Hobart wages and prices is the largest of any city, with Hobart wages averaging 19% lower than Sydney’s, while dwelling prices are close to 43% lower than Sydney’s.
Canberra, Australia’s highest-paid city, boasts an average wage/salary 6% higher than Sydney’s, yet dwelling prices are roughly 7.5% lower.
Kusher says there are a number of reasons why Sydney’s housing market continues to be the nation’s dearest – and geography is key.
“Urban expansion in Sydney is curtailed by the large tracts of national park and the large number of waterways located across the Sydney metro region.”
He says Sydney’s expensive housing is also due to its status as one of Australia’s most mature housing markets.
“The long-established inner city and coastal areas tend to push the overall median prices up. In fact, the outer-western and northern fringes of the Sydney metro region provide some of the most affordable capital city housing markets across the major capitals.”