Sydney and Melbourne buyers win big in property stakes
Sydney and Melbourne homeowners have built substantial property wealth over the last decade, but the trend looks set to ease.
Sydney and Melbourne homeowners have built substantial property wealth over the last decade, but the trend looks set to ease.Analysis from CoreLogic shows the proportion of Sydney and Melbourne dwellings worth at least double their purchase price has grown over the last decade. According to CoreLogic, 48.1% of Sydney dwellings are worth at least double their purchase price, up from 39.1% in 2007. Melbourne properties worth at least double their purchase price grew from 38.1% in 2007 to 47.3% in 2017.
The two capital cities outpaced the rest of the country, where the proportion of properties worth double their purchase price has actually fallen to 39.1%, down from 45.4% in 2007. The proportion of properties that have decreased in value, meanwhile, is on the rise.
CoreLogic found the proportion of properties worth at least 10% less than their purchase price has risen slightly from 3.2% in 2007 to 3.4% in 2017. The highest proportion of dwellings worth at least 10% less than their purchase price was in Western Australia, at 17.8%. While mining regions have been particularly hard hit, CoreLogic researcher Tim Lawless said resource-dependent areas may have found their floor.
“The good news for many mining regions is that housing market conditions seem to be moving through the bottom of their cycle. Transaction numbers are generally rising and advertised stock levels are reducing, which should help to promote some value recovery in these regions,” he said.
However, Sydney and Melbourne property owners shouldn’t expect the heady gains of the last decade to continue, Lawless said.
“It will be harder to double the value of a property in Sydney and Melbourne after such a sustained period of high capital gains, however markets such as Hobart and Canberra, which have gathered some momentum, are likely to see home owners benefit from improved capital gains that is likely to boost their overall wealth profile,” he said.
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