{"id":11638,"date":"2017-05-04T16:00:57","date_gmt":"2017-05-04T06:00:57","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=11638"},"modified":"2017-05-04T16:00:57","modified_gmt":"2017-05-04T06:00:57","slug":"sydney-and-melbourne-decouple","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/sydney-and-melbourne-decouple\/","title":{"rendered":"Sydney and Melbourne decouple"},"content":{"rendered":"<p><strong>In his column for\u00a0<a href=\"http:\/\/www.switzer.com.au\/the-experts\/john-mcgrath-property-expert\/sydney-and-melbourne-decouple\/\" target=\"_blank\" rel=\"noopener noreferrer\">Switzer<\/a>, John McGrath\u00a0discusses how Sydney and Melbourne lead the country&#8217;s residential price growth.\u00a0<a href=\"https:\/\/i0.wp.com\/realestatetalk.com.au\/wp-content\/uploads\/2014\/08\/mcgrath.jpg\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright size-full wp-image-1807\" alt=\"mcgrath\" src=\"https:\/\/i0.wp.com\/realestatetalk.com.au\/wp-content\/uploads\/2014\/08\/mcgrath.jpg?resize=150%2C143\" width=\"150\" height=\"143\" \/><\/a><\/strong><br \/>\nSydney and Melbourne continue to lead the way for residential price growth and have certainly decoupled from the rest of the country in recent years.<br \/>\nThis is a phenomenon seen all over the world, where the largest city or cities within many countries become separated from the rest of the market by the weight of demand.<br \/>\nAnd within these cities we continue to see an increasing \u201cManhattan Effect\u201d where people want to live as close to the CBD as possible, making desirable inner-ring suburbs very expensive places to live.<br \/>\n<strong>This decoupling effect isn\u2019t just happening because of the latest boom.<\/strong><br \/>\nSydney and Melbourne are now major international cities and an ideal alternate address for those living or doing business in Asia.<br \/>\nThere are several billion people on Australia\u2019s doorstep with a huge appetite to enjoy the lifestyle that we have.\u00a0<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright\" alt=\"Sydney melb\" src=\"https:\/\/i0.wp.com\/puassets.s3-ap-southeast-2.amazonaws.com\/wp-content\/uploads\/2016\/12\/Sydney-melb-300x169.jpg?resize=300%2C169\" width=\"300\" height=\"169\" \/><br \/>\nCompared to property values in other great cities of the world, many overseas buyers and expats still see Sydney and Melbourne as good value globally and a very safe place to invest.<br \/>\nTo demonstrate this decoupling, let\u2019s look at the history of price growth in Sydney and Melbourne compared to other capitals since 2010, which was recently documented in a report from independent property data analysts, CoreLogic.<br \/>\n<strong>Firstly, looking across all capital cities, property prices increased by a collective 44.9% from January 2010 to February 2017.<\/strong><br \/>\nDuring this time, Sydney and Melbourne were the only two cities with growth of more than 25%.<br \/>\nHere are the stats for each city.<\/p>\n<h4>Comparing growth across capital cities 2010-2017<\/h4>\n<ul>\n<li>Sydney dwelling values have increased by 78.3%<\/li>\n<li>Melbourne property values have increased by 55.1%<\/li>\n<li>Canberra property prices have increased by 23.8%<\/li>\n<li>Adelaide dwelling values have increased by 11%<\/li>\n<li>Brisbane home values have risen by 6.6%<\/li>\n<li>Hobart dwelling values have increased by 3.4%<\/li>\n<li>Perth dwelling values have declined by -3.3%<\/li>\n<li>Darwin property values have fallen by -5%<\/li>\n<\/ul>\n<p>The data clearly shows that Sydney and Melbourne are currently growing at a rate that is well apart from the rest of the country.<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright\" alt=\"sydney\" src=\"https:\/\/i0.wp.com\/puassets.s3-ap-southeast-2.amazonaws.com\/wp-content\/uploads\/2016\/09\/7402420_l-300x201.jpg?resize=300%2C201\" width=\"300\" height=\"201\" \/><br \/>\nThis hasn\u2019t always been the case but it\u2019s certainly the trend this decade.<br \/>\nNow, let\u2019s look at median house prices across our capital city markets.<br \/>\nOnce again, Sydney is the stand-out with Melbourne (and Canberra) a distant second but still well ahead of all other capitals.<br \/>\nStrong population growth and migration in Sydney and Melbourne, coupled with an ongoing undersupply of housing, will continue to power high buyer demand over the long term in both of these cities.<\/p>\n<h4>Median house prices across capital cities<\/h4>\n<ul>\n<li>Sydney $860,000<\/li>\n<li>Canberra $605,000<\/li>\n<li>Melbourne $650,000<\/li>\n<li>Brisbane $481,000<\/li>\n<li>Darwin $467,000<\/li>\n<li>Perth $472,000<\/li>\n<li>Adelaide $430,000<\/li>\n<li>Hobart $363,000<\/li>\n<\/ul>\n<p><em>Source: CoreLogic Hedonic Home Value Index April 2017, median prices based on settled sales over past three months \u00a0<\/em><\/p>\n<h4>So, after five years of phenomenal growth, what\u2019s next for Sydney and Melbourne?<\/h4>\n<p>Right now, it feels to me that these markets are at, or around, their peak for this cycle.<br \/>\nWe&#8217;ve seen strong double digit growth for five years and I can&#8217;t see any material uplift from here.\u00a0<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright\" alt=\"property cycle\" src=\"https:\/\/i0.wp.com\/puassets.s3-ap-southeast-2.amazonaws.com\/wp-content\/uploads\/2016\/09\/17034015_l-300x200.jpg?resize=300%2C200\" width=\"300\" height=\"200\" \/><br \/>\nHistorically, if and when there is a correction, the market gives back about half of the prior year\u2019s growth which would suggest that when prices stop rising, we are likely to see either a stabilisation at that point or perhaps a 5% correction.<br \/>\n<strong>Either way, you can never pick the top or bottom of the market until it has passed.<\/strong><br \/>\nBuyers taking a medium-term view will be well rewarded for buying into high quality Australian property now.<br \/>\nIf you\u2019re considering buying a home or investment in Sydney and Melbourne, do so with confidence but a little caution as well.<br \/>\nIf you have the long term in mind, then there\u2019s every reason to feel confident.<br \/>\nBut be aware that we\u2019ll shortly be coming to the end of the boom, so it\u2019s vitally important that you don\u2019t get carried away and buy above your budget.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In his column for\u00a0Switzer, John McGrath\u00a0discusses how Sydney and Melbourne lead the country&#8217;s residential price growth.\u00a0 Sydney and Melbourne continue to lead the way for residential price growth and have certainly decoupled from the rest of the country in recent years. This is a phenomenon&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":9134,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-11638","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-story"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Sydney and Melbourne decouple - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/sydney-and-melbourne-decouple\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sydney and Melbourne decouple - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"In his column for\u00a0Switzer, John McGrath\u00a0discusses how Sydney and Melbourne lead the country&#8217;s residential price growth.\u00a0 Sydney and Melbourne continue to lead the way for residential price growth and have certainly decoupled from the rest of the country in recent years. 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