On the back of yesterdays report regarding the “flat” capital gains for Sydney home prices, here’s the real kicker and detail from CoreLogic/RPData, showing its better to just buy a house in Sydney and earn more than the average wage in annual price appreciation:
As Tim Lawless puts it:
The wealth (sic) created from housing in Sydney and Melbourne has been exceptional over the past twelve months. In dollar terms, Sydney home owners have seen approximately $82,000 added to their wealth (sic) thanks to the strong capital gains over the year while home owners in Melbourne have seen the value of their dwelling grow by approximately $60,400. Brisbane home owners are $18,560 better off (sic) while Canberra owners have seen the value of their homes increase by approximately $21,900.
Yes I add the (sic) because really? Higher prices do not equal wealth, unless buying capability increases at the same rate. Wage growth is not just stuck at 2-3%, its falling sharply:
But nominal property price increases are tracking at three to four times that rate in Sydney and Melbourne:
Have you seen your wage increase nearly 50% since the nadir of the GFC? Or nearly double if a Sydneysider (excusing real estate agents):
And remember, investing in property is all about rental yield – which is now tracking a whopping 3% in Sydney – gross before those minor little expenses like interest repayments, maintenance and so forth.
Here are the index results by capital city including gross rental returns. Nothing to see here says the RBA, all is well.
