Sydney's Soaring Housing Prices

Housing prices in Sydney has been rapidly increasing. The rise has been thrice as fast as the growth of the capital markets in the city, ABC reported. According to the estimates provided by the ABS, the Australian housing is now valued at AU$7.44 trillion. This surge left all other cities far behind.

The Bureau of Statistics residential property price index reported a sharp increase of price from 3.1 percent to 13.1 percent within a year. Statistics showed that the growth of housing price exceeded the growth of rising markets of Melbourne for about 0.6 percent and 4.7 annually.

Cities like Brisbane, Canberra, Hobart and Adelaide had suitable prices until this year. However, the capital cities of Perth and Darwin had growth as low as 0.1 and 0.2 per cent over the March quarter, and 0.3 and 0.4 per cent for the entire last year.

Chris Caton, BT Financial Group chief economist expressed his dissatisfaction about the growing prices which would generate a lot economic difficulties and ridiculed the ABS figures. “A quick perusal of these data shows little sign of a bubble and even less of the coming 'bloodbath' covered in today's press. Perhaps that's not going to happen!” he suggested.

Similar comments came from Reserve Bank governor and Treasury secretary. St. George Bank senior Hans Kunnen compared Sydney to a sore thumb and stated that the capital city has been plagued with various housing problems, self funded investing, low interest rates, lack of supply and foreign demands. ABC news reported that the average price of a residential dwelling was as high as AU$745249.24 that included both houses and units in the March quarter.

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