Depressing Sydney house prices stat
IF YOU'RE a millennial, you've probably already resigned yourself to the fact that you'll never own a home in Sydney.
But just to really rub it in, depressing new data has found that Sydney is one of the world's most overvalued cities for real estate.
According to The Economist's latest annual global house-price index, Sydney is among the world's top 10 metropolises where property price booms are "unsustainable" compared to household incomes.
While Sydney house prices have fallen by 4.5 per cent over the past year, the Harbour City ranked seventh on the global cities index, with home prices "overvalued" by 50 per cent when compared to average earnings.
That puts us up there with Amsterdam, London and Vancouver as some of the world's leading cities for houses that are more or less unaffordable in proportion to our earnings in this day and age.
The report attributes "demand, supply and the cost of money" as the three reasons Sydney experienced a property boom - and why it may now be falling. It also notes foreign investment as a driver of the boost.
The good news, at least, is that property prices are nearing a turning point. The report notes that the average rate of house-price inflation across the overvalued cities has slowed, and in Sydney's case, fallen from its peak.
Sydney property prices are forecast to keep falling for the rest of the year thanks to a steep drop in demand.
At the same time, Australia is becoming less welcoming to foreign capital, increasing property-transaction taxes for non-residents.
"It is clear that on a historic basis housing costs are expensive and values are falling indicating that the prices that people are seeking are not prices that potential buyers are willing to meet," CoreLogic analyst Cameron Kusher told The New Daily.
Figures released last month showed the number of buyers actively looking for a home dropped by nearly a quarter over the past year, pushing the median price of a Sydney house down 14 per cent and the median unit price down 7.9 per cent.
The realestate.com.au research, provided to The Daily Telegraph, further revealed Sydney real estate would not rebound by spring - as some pundits had earlier forecast.
The listing portal's chief economist Nerida Conisbee said the market instead looked more likely to bottom out by early next year.
"There is nothing to suggest prices will be going up at all this year, outside of a few areas," she said.
In the meantime, homebuyers could capitalise on unusually "favourable" buying conditions not seen since the GFC in 2008, Ms Conisbee said.