Sydney red hot
Some of what is happening in Sydney's property market is "crazy" said Reserve Bank Governor Glenn Stevens in his Brisbane presentation yesterday.
He's not wrong there.
But house prices in Sydney won't stop the Reserve Bank cutting interest rates lower still as required, he said.
Any way you look at it, Sydney's desirable property markets are expensive...and they are going to remain so.
John McGrath highlighted a few out the reasons why last week on Switzer here.
"Sydney’s population is expected to reach 6.1 million in 2031, which means 80,000 new people will move here each year.
Based on the assumption of 1.5 people per dwelling (in recognition of the rise in apartment living), Sydney will need 53,000 new dwellings per year.
The HIA says 54,000 new dwellings will commence in NSW in 2015 – but that’s for the entire state. That’s also a record high figure, with annual new builds expected to decline to 47,000 per year over the next four years."
I'm not quite sure where the assumption of 1.5 persons per dwellings came from, but the principal is spot on.
In the most desirable areas of Sydney demand is outstripping available supply by a factor of many as covered here previously.
SBS News lead with a short piece on the story here yesterday,
I note that Demographia's measures of housing affordability have previously been criticised for not including all dwellings (i.e for excluding apartments and attached dwellings).
Yes, any way you look at it Sydney housing is expensive, but that said I don't expect anything to change in that regard over the next couple of decades.
Watch the SBS News piece here.