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Median Sydney home price to top $1million by 2020
Jack Han reports on the growing opportunity for investment property.
February 1, 2010
Sydney’s median house prices will likely reach above $1 million by 2020, according to a new study conducted on metropolitan areas in the city. This has put the focus back on investment home loans, as Sydneysiders consider the profits of high growth properties in the near future.
John Edwards, CEO of Residex believes that at the current rate of growth, median property prices in Sydney will increase to about $1.2 million in 10 years.
This means that within 10 years, most properties in many Sydney suburbs will be just as expensive as our priciest areas, which will likely force lower income earners to the outer brinks of the city.
The looming danger of not affording a home is not just restricted to Sydney either. By 2019, Melbourne is expected to be only a few years behind Sydney’s house prices, meaning that a similar trend will ripple throughout all of Australia.
APM’s chief economist, Matthew Bell told the Sydney Morning Herald that he believes there will be many adverse social effects caused by the home ownership disparity.
“Home ownership has advantages in terms of investment and tax, and the children of home owners will eventually benefit through inheritance. They will get richer while those outside the market are less and less likely to ever be able to get in.”
Another consequence of housing price rises is always the flood of rental demand, as thousands of Australians are pushed from the bottom end of the housing market into rental properties.
This could see inner cities become a hub for high income earners, creating new geographical divides between the wealthy and working class.
If housing does become less affordable, Generation Y and Millennium Kids are expected to live at home longer with their parents, and workers moving further away from the city will face lengthier commutes as well as renting for longer.
As a result, investment home loans will become hot stock as buyers look for the cheapest interest rates to finance their property purchases.
The future of housing prices may seem intimidating, but you can start comparing home loans today, and join the thousands of Australians securing their stake in their city for the years to come.
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