Median value reaches $ 1 million in more than 200 suburbs, excluding millennials from housing

Median house prices in more than 200 Australian suburbs have passed the $ 1 million mark as house prices rise sharply.

CoreLogic’s inaugural Million Dollar Markets report released today revealed 218 suburbs where median house or unit values ​​hit the million dollar mark in May.

In the past 12 months, 198 of these were real estate markets and 20 were unit markets.

Sydney has carved out the lion’s share, with median house and unit values ​​exceeding the median $ 1 million in 54 suburbs. The city now has 340 homes and 79 unit markets with a current median value of $ 1 million or more, 25.4% more than a year ago.

Melbourne is in second position, where 184 homes and 8 unit markets have a current median value of $ 1 million, up 34.3% from the same time last year.

Thumbnail_image004.png

Source: CoreLogic

The regional real estate market is equally hot: the regional NSW saw a 267% increase in the number of suburbs with a median value of $ 1 million compared to the same period last year, while the Victoria region saw an increase of 34.3%.

CoreLogic’s head of research, Eliza Owen, said the sharp rise in house prices was more disappointing news for first-time buyers.

“For first-time buyers, who tend to be more price sensitive, the higher house prices and the volume of the suburbs becoming million dollar markets are likely building on the challenges already faced by these potential buyers. when it comes to homeownership and affordability, ”said Ms. Owen.

“The latest ABS financial data reinforced this, showing that April marked the third consecutive month of declining secured finance for the purchase of real estate by first-time homebuyers.”

First-time homebuyers outside the market look to investing

With house prices rising faster than most people’s ability to save, more and more young people are turning to other means of increasing their wealth.

Sydneysider Daniel Child and his wife (pictured right) have saved up a deposit over the past six years and were able to build up a deposit of $ 120,000 during that time, but were frustrated by the poor return on their money with record interest rate. low.

Daniel Child and family # 2.jpeg

“Over the past 18 months, these savings have given us very little return. So we have explored ways to make our money work harder for us,” Daniel told Savings.com.au.

“The equity market provided this opportunity, especially at the onset of the pandemic when the markets fell. It seemed like a good time to invest and that’s exactly what we did.”

Two years ago Daniel invested $ 10,000 in the stock market and his money has already doubled to $ 20,000 through the Goodments by Dough platform.

If he had left his money in the bank with a 2% interest rate, his money would only have increased by $ 200 during that time.

The couple, who have an 18-month-old son and a daughter due in September, hope to buy soon, but are not confident about their chances of getting anything in Sydney.

“Looking at Sydney, it is clear that it will be very difficult if the current market persists or increases further,” Daniel said.

“The intention to achieve favorable returns from stocks was to increase our funds for a deposit, but we recognize that there is still a significant gap between what we are likely to have in the short term and the amount required. for an average two to three bedroom house. .

“We love living in Sydney and will be here for at least the next 18 months, but beyond that we plan to move away from the city.”

He said that with housing prices soaring, young people wishing to enter the market should consider other ways to increase their deposit.

“The traditional expectation of saving enough for a house through decent work no longer applies to many, so we need to be creative with ways to achieve our financial goals,” Daniel said.

“Look for other ways to grow your wealth, whether it’s through stocks, digital currency, side activities, or whatever.

“This means not only diversifying, but being realistic about your goals (like shopping in the heart of Sydney rather than 50 km outside) and understanding what works best for your situation.

“While stocks can perform well, there is an inherent risk in trading that people should be aware of before they ‘go all-in’.”

Young investors turn their backs on the real estate market

According to the latest ASX According to an Australian investor study, almost a quarter of investors have only started investing in the past two years, like Daniel.

Many are 25 or younger, and women now make up almost half of all new investors.

Dough Founder and CEO Andy Taylor said Millennials and Gen Z are gravitating to the stock market in record numbers to grow their economies and build wealth.

Andy Taylor CEO of Dough .jpeg

Pictured: Andy Taylor. Image provided.

“Young people realize that buying property is no longer an option, so they turn to stocks to make their money work harder and secure their plan for the future,” he said.

“Cryptocurrencies have also aroused the interest of the younger generation who want to invest with a long-term strategy.

“This is driving demand for wealth building platforms like Goodments to simplify buying and selling of stocks, making it easier to participate, use and low cost. “

Grade 12 student Aaron Marcellino (pictured right) is already trying to build wealth on the stock market under his father’s leadership and aims to use stocks to help him buy property in his early 20s.

Aaron.jpg

“I thought it would be a good time to start investing for the future, especially when stocks were cheap due to the coronavirus,” he told Savings.com.au.

“One of the main reasons I decided to get into stocks was that they were easily accessible with the funds I had, which the real estate market is not right now.”

He admits he’s not optimistic about his generation’s ability to enter the real estate market.

“I think it will be very difficult, almost impossible for my generation to buy a house in their twenties,” he said.

“[My generation] may have to wait until their mid-thirties to own a home for themselves. It would be ideal for me to own a home in Sydney, but it’s something that may have to wait a bit. “

Recent data from CoreLogic, which compared national housing values ​​and average incomes, found that working poor could only afford 17.6% of the available housing stock in Australia – or just 3% in Sydney and 4% in Melbourne.

Figures from the Australian Bureau of Statistic (ABS) released on Tuesday revealed that residential property prices rose 5.4% in the March quarter – the strongest quarterly growth since the December 2009 quarter.

The total value of residential dwellings also exceeded $ 8 trillion for the first time, with NSW accounting for 40%, or $ 3.3 trillion, of total housing values ​​in Australia.

Related: Experts Call for Royal Commission and RBA to Address Soaring House Prices


Pictured: Daniel Child and partner. Image provided.


Source link

About Hubert Lee

Check Also

What will it look like?

Are we witnessing the feminization of America? And if so, is that a good thing …

Leave a Reply

Your email address will not be published. Required fields are marked *