A study published in the journal Cities predicts that property prices in Greater Sydney will remain out of reach for single median income earners until at least 2031. The research, conducted by Dr. Mustapha Bangura (UTS) and Professor Chyi Lin Lee (UNSW), reveals that individuals earning the median income in NSW struggle to afford property without significant financial support. Analysis of trends from 2004 to 2021 shows a 23.7% price increase from December 2020 to December 2021, with Sydney's median house price at USD 1.6 million. The study underscores the urgent need for policy interventions to address Sydney's housing affordability crisis.
Property prices across Greater Sydney are predicted to stay out of reach for single median income earners for at least the next decade, according to a recent study.
The study, which assessed housing affordability in Greater Sydney, found that individuals earning the median part-time or full-time income in New South Wales (NSW) are unable to afford property purchases without significant financial support, such as help from family.
Published in the journal Cities, the study projects Sydney's housing market from 2022 through to the end of 2031. It is based on an analysis of market trends from 2004 to 2021. Researchers Dr. Mustapha Bangura from the University of Technology Sydney (UTS) and Professor Chyi Lin Lee from the University of New South Wales (UNSW) examined current entry affordability for both strata (apartment) and non-strata (house) property types.
The researchers used data from the Australian Bureau of Statistics (ABS), noting a 23.7% increase in residential property prices between December 2020 and December 2021. Sydney remains the most expensive city in Australia for property, with the median house price in the June quarter reported to be USD 1.6 million.
According to the study, no area in Sydney was affordable based on the 2021 NSW weekly median income. Part-time earners in nearly all parts of Sydney would struggle to purchase a property, even if they devoted their entire salary to housing.
The research highlighted that housing affordability in Sydney has shown little improvement, despite minor declines during the Global Financial Crisis (2008-2009) and the COVID-19 pandemic (2020-2021). The study concluded that Sydney residents will need to save significantly and for an extended period to achieve home ownership.
A household is generally considered to be in mortgage stress if they spend more than 30% of their pre-tax income on home loan repayments. Dr. Bangura warned of potential negative consequences if housing repayments exceeding this threshold become more common. He suggested that higher housing costs could lead to financial strain for many households, potentially impacting overall economic stability.
The study's projections are based on historical trends and current market conditions, providing a bleak outlook for future home buyers in Sydney. As property prices continue to rise, the dream of owning a home becomes increasingly distant for many individuals and families.
With the housing market showing no signs of substantial improvement in affordability, Sydney's residents may need to rely on alternative housing solutions or significant financial aid from family and other sources to enter the property market. The ongoing affordability crisis underscores the need for policy interventions and innovative solutions to make housing more accessible for the average income earner.
In summary, the study paints a challenging picture for potential homebuyers in Sydney, highlighting the persistent and growing issue of housing affordability in one of Australia's most expensive cities.
Advertisement
Facebook
Whatsapp
