Sydney house prices have risen 87.9 per cent since GFC new CoreLogic report reveals

Sydney house prices have risen 87.9 per cent since GFC new CoreLogic report reveals

82349cc467275f92f9556fd997287b96                         CoreLogic’s Tim Lawless says Sydney has outperformed since the 2008 GFC.

SYDNEY’S property market officially made the best global financial crisis recovery of any city in the country with values boosting 87.9 per cent in eight years, new analysis has revealed.

Research conducted by CoreLogic research head Tim Lawless revealed while other capital cities had seen modest increases in home values over the past 7.5 years Sydney and Melbourne had surged ahead with an unprecedented jump in prices. 
CoreLogic’s Tim Lawless says Sydney has outperformed since the 2008 GFC.
“As you’d expect, Sydney and Melbourne led the charge in values growth, while other capitals recorded a relatively mute outcome,” Mr Lawless said.

“The 2007/08 financial crisis hit Australia’s housing market hard and delivered a -6.1 per cent decline in home values between March and December 2008.”

“Fortunately, aggressive interest rate cuts by the Reserve Bank (RBA) and the introduction of the boost to the First Home Owners Grant, averted further home value declines.

In fact, home values began to rise across two cycles; from December 2008 and in June 2016, 7.5 years later, combined capital city home values are now 54.9 per cent higher,” he said.

2_gpbje5   A recent Sydney auction where a dumpy terrace in Waterloo St, Surry Hills sold more    than $100,000 over reserve. Adam Yip/The Daily Telegraph

A recent Sydney auction where a dumpy terrace in Waterloo St, Surry Hills sold more than $100,000 over reserve. Adam Yip/The Daily Telegraph
Mr Lawless said while other cities had recorded growth which was similar or below the rate of inflation Sydney and Melbourne had seen boosted growth.

From December 2008 to October 2010, dwelling values rose in all cities with Sydney, Melbourne and Darwin the standouts, Mr Lawless said.
“Despite very low interest rates, Brisbane, Adelaide, Perth and Hobart recorded little value growth over this period,” he said.

“The data indicates that since the financial crisis the capital city housing market could best be described as being ‘extremely interest rate sensitive’.”

“ A deeper dive into the data shows that in reality, only Sydney and Melbourne have responded to the stimulus of low interest rates.”

“The relative strength of the Sydney and Melbourne economies and the much greater employment growth has clearly driven housing values higher in these cities.”

“Until we see an improvement in economies outside of Sydney and Melbourne, it’s unlikely that an era of sustainable growth will return in these areas despite extremely low interest rates, which look set to move even lower over coming months.

“While affording to purchase a home in Sydney and Melbourne is becoming a stretch for many, existing homeowners in these cities have experienced substantial equity increases.”

In closing, Mr Lawless said, “With rental growth and yields at record lows, it will be interesting to see if investors and upgraders in the two largest capital cities continue to show a thirst for housing in these cities given the growth phase has now been running for more than four years.”

“Perhaps it’s time for the buyers to look to the outer city or regional markets.”

 

Source:  http://www.dailytelegraph.com.au/realestate/experts/sydney-house-prices-have-risen-879-per-cent-since-gfc-new-corelogic-report-reveals/news-story/46a5ad73316d39bfa9e7638180788144

Date: 14th July , 2016 

Author: Annabel Hennessy

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