East West House Price Check
This week APM released median house price data for March quarter 2006. The East Coast cities are still in a bear market with prices down for the quarter from 1 to 2% in Sydney, Melbourne, Canberra and Hobart. In the West at Perth, which got into the 2002 price boom a bit slower than Sydney (and now pushed along by the mining boom), prices are still rocking along with a rise of 5.3% for the quarter and 26.1% for the 12 months. Median price is still 23% below Sydney at $396,000 verus $516,000.
The 7% decline in Sydney House prices from a peak of $552,000 in June 2004 and the 8.4% rise in average wages since then, has raised some hope that Generation X and Y may one day buy a house like their parents did. At the peak of the market in 2004 Australian house prices were 8.0 times annual average earnings. This has now come down to 7.5 (9.7 in Sydney). When their parents bought houses in the 1970?s and early 1980?s the multiple was between 3.4 and 4.2. We have added a Dataseries in Research Centre where you can graph this multiple for Median Australian House price over Annual AWOTE at quarterly intervals. Select 'Values' rather than '% Incr.' to see the multiple.
Posted Saturday, 6 May 2006
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