Sydney's housing market continues to break records, with the latest Domain data showing median house prices reaching USD 1,655,000 in the September quarter, marking a seventh consecutive quarterly gain. Unit prices also climbed, hitting USD 815,300. Sydney's home prices now outstrip Canberra's, Australia's second-most expensive city, by over USD 573,400. A recent CBA analysis shows housing affordability in Sydney is at its lowest on record, and PropTrack identifies New South Wales as the least affordable state in Australia. Rising rents add further strain, with median house rents up 49% since 2019. These affordability pressures are expected to persist with Sydney's projected population growth.
The latest data from Domain reveals that Sydney's housing market remains firmly on the rise, with the median house price reaching a record USD 1,655,000 in the September quarter-marking a gain for the seventh consecutive quarter. Similarly, Sydney's unit prices climbed for the seventh quarter, reaching a new peak of USD 815,300. Notably, Sydney's median house price now surpasses Canberra, Australia's second-most expensive capital city, by around USD 573,400.
A recent analysis by CBA highlights that Sydney's housing affordability has reached an all-time low, with mortgage payments on the median-priced home becoming increasingly burdensome, even when compared to dual average full-time incomes. PropTrack's latest housing affordability report further identifies New South Wales as the least affordable state in Australia for homeownership. Since 2020-21, affordability in the region has sharply declined, now standing well below the previous low observed in 2007-08, measured by the proportion of homes accessible to various income levels.
PropTrack reports that in 2023-24, median-income households in New South Wales could afford only 10% of the homes sold, with typical renter households aiming to buy their first home finding just 8% of homes within reach. For lower-income households, the picture is even more challenging; households at the 20th percentile income level could afford just 3% of homes sold over the past year. Sydney renters also face steep costs, as median asking rents for houses rose to a record USD 775 per week in the September 2024 quarter, representing a 49% increase from USD 520 in the September 2019 quarter. Unit rents also hit an all-time high of USD 720 per week, up 39% from USD 517 per week in 2019.
As the Australian Bureau of Statistics forecasts Sydney's population to grow to 8.3 million by 2070, driven by continued high net overseas migration, these housing cost trends are likely to persist into the foreseeable future.
In conclusion, home prices and rental costs at record highs and affordability at unprecedented lows, Sydney's housing market increasingly challenges both potential homeowners and renters. Limited affordability options-only 10% of properties are within reach for median-income households-highlight the stark barriers to entry in the market, particularly for first-time buyers and low-income earners. As Sydney's population continues to grow, largely driven by high net overseas migration, affordability may become an even more pressing issue. Addressing this will likely require a coordinated effort across housing supply, policy adjustments, and potential affordability initiatives to ease the strain on current and future residents.
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