The outlandish prices of properties in the Sydney area have become fodder for news outlets. With prices for a rundown 1900 three bed home at A$2.6 million and a parking space costing A$120,000, there is no respite in sight for property buyers in the near future, according to a report from au.news.yahoo.com.
Factors such as low interest rates, a rapidly increasing population, endemic lack of supply of new homes in the area, a tax system providing breaks for property owners and the influx of Asian investments have all contributed to the current skyrocketing prices in Sydney and other major cities.
This was seconded by a report from reuters.com, which identified the high participation of foreigners in the market, projected to have purchased at least a third of total supply in the market. Much of the purchases have been in the Sydney and Melbourne area.
Overall, the Australian Bureau of Statistics said that housing values have increased between A$425 billion to A$5.5 trillion for the period ending March 2015. While this may seem to be good news to current property owners, the figures portents the difficulties for the next generation in affording to purchase a house Down Under in the future.
This also shows the disparity between and amongst highly urbanized areas and other local communities. According to a report from abc.net.au, one of the more affected areas is Newcastle, which has always followed Sydney's home prices.
This was observed during a study from BIS Shrapnel, lead by Angie Zigomanis. He said, "Traditionally, when the Sydney market goes gang-busters, we tend to see a pick-up in Newcastle as well as people move up north into the Hunter region for better affordability."
"But, at the moment, that's not happening," he added. "The Hunter is being impacted by the fall off in resources sector investment, and that's having an impact on purchaser demand and confidence."
