02 Jul How the rest of the world sees Sydney’s house prices
Australia’s free-floating currency has been a major factor in the country’s astonishing 24 years of uninterrupted economic growth.
It is not without its messy side-effects, however.
Sydney’s property prices have been on a scorching tear in recent years, with the median house price up more than 43% since May 2012. The role of foreign buyers has been one of the big talking points in the market, with the federal government introducing tougher rules for overseas buyers earlier this year.
But because the Australian dollar has been weakening against other currencies in that period, to an outsider looking in, Sydney houses actually look like great value.
Cameron Kusher of property research firm CoreLogic tweeted this jaw-dropping chart today showing what Sydney house prices look like when you translate them into other currencies. To buyers from the US and China, prices are basically flat.
Kusher said it was “no wonder overseas investors are sniffing around Sydney housing”. He explained:
Since May 2012 is $US terms Sydney home values have increased by 13.0%, in Euros they have risen 25.2% in Chinese Yuan they have increased by 10.0%, in UK Pounds they are 11.3% higher and in Malaysian Ringgit they are 34.5% higher. Although the rising value of homes creates affordability challenges for domestic purchasers, it is not an issue for those looking to purchase with funds borrowed overseas. Not to mention that the interest rate that many overseas buyers would be paying is significantly lower than those offered by domestic lenders.
Treasurer Joe Hockey infamously said recently that the first step to buying a home is getting a good job. Maybe he should have added that you should be looking for that job in America.
Steve Day | Real Estate Agent Cronulla, Burraneer, Woolooware, Caringbah South, Lilli Pilli, Dolans Bay, Port Hacking