If you thought 2016 was a bad year it gets worse as another gorilla – the ability of the average Australian family to own a home – is shot in the back as CoreLogic announces its capital city house price results, showing a ridiculous 11% rise over the calendar year.
December 2016 saw capital city dwelling values rise by 1.4%, taking the annual capital gain for 2016 to 10.9% – the highest growth rate for a calendar year since 2009. Factoring in gross rental yields and capital gains, housing as an asset class, earned a total annual return of 14.7% based on the combined capital cities index results.
Across Australia’s capital cities, the annual change in dwelling values for 2016 ranged from -4.3% in Perth to 15.5% in Sydney, with Melbourne and Hobart also showing annual capital gains higher than 10%.
Charts from ABC really highlight the stupidity of prices in Sydney particularly:
Specuvestors are best to head to Hobart, the most “affordable” capital city with a median dwelling price of only $345,000 (so only about 7 times Tasmanian median household income according to the recent HILDA survey) with a stonking 5.1% gross rental yield.
What will 2017 bring with a massive overhang of supply of apartments and a lower Aussie dollar?