Which Capital City Is The Pick Of The bunch?

Which Capital City is the pick of the bunch that has house prices more affordable than they were in 2011??

BRISBANE homes are more affordable now than five years ago, new research has found – the only east coast capital city to boast improvements across four measures of affordability.

The CoreLogic Housing Affordability Report found that the cost of housing in Brisbane now made up a smaller proportion of household income than it did in 2011.

It found that the median dwelling across Brisbane cost 5.7 times the median annual household income, compared to 5.9 times income five years ago.

Rental properties were also more affordable, the report found, making up 25.4 per cent of annual household income compared to 26.4 per cent five year ago.

It was an impressive result given “the past five years has seen national dwelling prices rise by 19 per cent”, according to CoreLogic. At the same time ANU research had found that household incomes had grown by just 9.2 per cent.

Record low interest rates were a major factor in the result, but Brisbane showed improvements in other affordability measures that excluded the cost of debt, such as dwelling price to income ratio, and the proportion of household income required for a 20 per cent deposit.

The national price to income ratio was 6.9 times (7.2 times for houses and 6.4 times for units).

This coupled with the fact that more suburbs than ever are joining the ‘millionaires club’ and as our economist Clifford Bennett covered in his “The biggest risk in the property market is not being in the property market” - these figures definitely back it up:

The number of suburbs with a median house price of $1 million has risen 176 per cent

According to new figures from CoreLogic, the number of suburbs nationally with a median house price of at least seven figures is rising. Significantly.

Over the five years to December 2016, the number of suburbs across the country with a median value of at least $1 million rose by a 176 per cent. There were 760 suburbs in the million-dollar club at the end of last year, compared to 275 suburbs at the end of 2011.

What is even more frightening, or pleasing, is that by the end of 2016, 136 suburbs had a median house price of at least $2 million, an increase of 249 per cent over the five years.

“While rising housing values increase the asset wealth of owners, it is also reflective of the fact that for those who don’t yet own a home it is becoming increasingly difficult to save a large enough deposit in order to purchase a home,” CoreLogic’s Cameron Kusher wrote.

And finally - as I covered at our National Conference this month - we often talk about "how expensive" our house prices are, compared to other regions.

Well, looking at the below, you can see that we actually have a fair bit of a way to go before we catch up with the rest of the world!

This is how little floor space $1 million will buy you in London, New York, and other prime cities

According to luxury estate agents Knight Frank’s new “Wealth Report,” for the world’s richest people, $US1 million is pocket money when it comes to buying in the world’s most desirable cities.

Every year, Knight Frank releases a report on everything the world’s richest spend their money on, where they go, and where they live. Embedded within the report is a section on prime properties and spending trends for the world’s wealthiest.

And according to this chart, $US1 million buys them hardly any floor space in some of the most popular cities for the ultra rich!

Have a great weekend and catch you next week!

Troy Gunasekera // National Manager