House values across the capital cities

With the release of the HIA-CBA Affordability Index this week there has been plenty of focus on the fact that Melbourne has overtaken Sydney as the country’s least affordable capital city property market.  Also with the residential property market recording value growth coming to a halt, there has been plenty of commentary around the lack of affordability and some suggest property values are set for a significant fall.

This week we thought we’d let you make up your own mind.  Detailed below are a collection of thematic maps for each capital city.  These maps highlight the median value of a house (note that units havent been included in this analysis) across each suburb within the capital cities that have recorded at least 10 sales over the 12 months to August 2010.

Sydney house values

Sydney small

Melbourne house values

Melbourne small

Brisbane house values

Brisbane small

Adelaide house values

Adelaide small

Perth house values

Perth small

Hobart house values

Hobart small

Darwin house values

Darwin small

Canberra house values

Canberra small

The charts clearly highlight that if you expect to purchase a house on the water or within 10 kilometres of most capital cities you are going to need to spend a substantial amount of money.  Most people aspire to live close to the city centre and for this reason we expect demand to remain strong for inner city properties.

The maps also indicate that there are still affordable options in most capital cities however, some buyers may need to re-evaluate their expectations of where they can afford to live if they have limited funds.  If you are looking at buying a house and have limited funds it is going to be extremely unlikely that you will be able to live within the inner city, given this these purchasers should focus on areas with ample supply of shops, restaurants, schools and quality infrastructure such as trains and major roads.

About Tim Lawless

Tim heads up the RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia

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6 Responses to House values across the capital cities

  1. Alex Barton November 26, 2010 at 4:19 pm #

    Demand will lead to supply if the market is functioning normally. But in Sydney and to a lesser extent other cities, supply is artificially held back by government zoning restrictions and levies on development, especially in the high demand areas close to water or city centre. The cost of production has grown at a much higher rate than house prices. That’s what keeps prices high in these areas. Governments should reduce their tax grab, release more land, and approve higher density zoning. Then developers would build new stock knowing they would make money from the development. Only then will house prices return to fair levels.

    Alex Barton
    Australian Property Forum

    • Iggy Damiani December 1, 2010 at 11:08 pm #

      In my view, all the heat zones show is the fact that governments for many years/decades have neglected infrastracture!!
      If you had a speed train from Syd to Yass(??) and it took 35 mins to get home – you would see metropolis prices fall!!??

  2. Paul Thewlis November 27, 2010 at 9:10 am #

    We have all the tools to fix affordability. The problem is they are not coming together well enough. There is no lack of finance to build/buy more dwellings. But we have an imbalance between the finance available for individual houses and higher density developments. We know that people don’t want a big backyard anymore, that they will buy medium density property located in lifestyle locations but developers can’t get finance from the banks without pre-sales. The governments NRAS program (see http://www.nrasincentives.com.au) is providing incentives for investors to buy new properties. Onyx has no shortage of people interested in buying NRAS property which could provide the pre-sales. There is not enough stoick at this stage to satisfy demand. The solution is in front of us it just needs to be co-oridinated better

  3. Garis Alexander December 2, 2010 at 10:42 am #

    There is a more compelling answer that has been with us a long time, that is economically fair and efficient. It motivates land owners to enable their land to be used more efficiently and at higher densities.

    Introduce universal Land Tax (really economic rent) on unimproved values, in conjunction with complementary planning and development rules to allow the land market to work, and to stop land hoarding, consistent with agreed social and environmental issues.

    This revenue to governments to offset other taxes such as 100% of stamp duty and some of our income taxes, etc, so the net tax take is unchanged. The consequences are a profound improvement in efficiency and increase in average wealth.

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