Median House Price Comparison – Sydney v Perth
This past week I have been wading through statistics looking for historical trends and as a result I constructed a long term comparison of the median house prices of Sydney and Perth, which makes for interesting analysis.
Did you know that the Perth median house price in 2017 was around $500,000 whilst Sydney hit $1,111,100. What makes this more remarkable is that just 8 years ago the price difference was just $94,000.
In fact median prices across the two cities have been within 20% of each other in two distinct periods, in the 1970s and again in 2009.
So the million dollar question, quite literally, is will they meet again sometime in the future?
Can the trend we saw in Sydney between 2003 and 2009 occur again over the next 5 years?
… only time will tell.
Now, going back to last month, I mentioned we would discuss ‘location’ in more detail when considering buying property. This is relevant whether you are looking to buy as an Owner Occupier or Investor.
As a general rule we suggest buying property within 15kms of the capital city. In Perth this represents about 30% of all suburbs that hug either the city or the coast. Typically if you are looking at coastal suburbs you can end up a bit further than 15kms from the city and still expect stable long term growth.
But is it good enough to just assume any property, within any suburb, within 15kms of the City, will do well over the long term? Well the answer is yes… and no, depending on your definition of long term. If you are talking 15 years plus the answer is yes. If you are talking 5 to 10 years, not necessarily.
So let’s think a little more specifically about what makes a good suburb or location:
- Friendly neighbourhood
- Efficient and reliable access to employment via road infrastructure and public transport
- Proximity to amenities including shops, restaurants and entertainment
- Placement within desirable school zones
- Access to parks and recreation
The trump card is to find a suburb that ticks most of the boxes above and those missing are on their way in either a planning or construction sense – think Scarborough with the foreshore development; Vic Park with the new stadium and Crown upgrade; Claremont with Landcorps Oval development and easy access to shopping, public transport and amenities on its door step.
Some of the big ticket infrastructure projects in Perth in recent times include:
- Perth City Link
- Elizabeth Quay
- Perth Stadium
- Crown 6 Star Hotel and Entertainment Complex
- Perth Children’s Hospital
- The Gateway Roads Project
- Perth Airport Expansion and Upgrade
- Fiona Stanley Hospital
- Scarborough Redevelopment under MRA
- Claremont on the Park – Landcorp development
The list above is certainly extensive but by no means covers all of the exciting infrastructure projects that have either opened or are presently under construction and opening soon.
Each of the above projects will create either great amenity or a great source of employment and surrounding suburbs will benefit.
If you are a baby boomer thinking about “right-sizing” you could be considering suburbs close to the new stadium or Perth airport as you might enjoy going to the footy and/or travel a lot. You might consider Claremont allowing you to stay in the Western Suburbs but in a more secure lock-up and leave environment.
If you are a young professional or family you may consider Scarborough or Vic Park areas as still being relatively affordable with a lot of fantastic amenities and improving all the time.
If you are an Investor it depends on your budget, risk profile and desired returns.
Seems this discussion can’t be answered in one newsletter and I’d welcome the opportunity to listen to your considerations and provide a sounding board for your thoughts.
For the moment though, it’s off to South Africa for me this Sunday with the 90km Comrades Ultra Marathon on Sunday 10th June.
Having already raised 66% of my goal, I invite you to consider supporting my charity initiative – Vinnies Tom Fisher House which offers an amazing service to those most in need, our homeless.
More details here
In the meantime, I wish you and your families an enjoyable and safe WA Day long weekend.
All the very best!
Richard