Average home prices will hit $7 million by 2030 in some Sydney regions if growth trends continue
Aidan Devine
30 NOV 2019
Sydney home prices will likely double in the next decade.
Sydney real estate may cost an arm and a leg now but it will be a steal compared to the prices future generations will pay.
Economic modelling has revealed home buyers could be paying prices of up to $7.5 million, on average, in some city council areas by the end of 2030 – double what they are currently.
This assumed property values continued growing at the same average annual rate as over the past 30 years, a period characterised by recessions and economic booms, along with housing rises and downturns.
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Sydney house values increased by an average of 6.8 per cent a year over the period, while unit values grew by about 6.4 per cent a year.
Were the market to continue on this trajectory, a median priced house in the Greater Sydney area, including the Blue Mountains and Central Coast, will cost $1.74 million in 2030, almost double the current median of $900,000.
Sydney will remain pricey because it is difficult for developers to supply the market with new housing.
A median priced unit, meanwhile, will grow from $695,000 currently to $1.24 million by the end of the next decade, according to the analysis of CoreLogic and ABS figures.
Property experts warned one of the factors likely to keep prices growing was a dire supply of buildable land, which was one of the key drivers of house price growth in the past.
Housing supply is set to remain a major problem for the market in the years ahead, especially within the eastern suburbs and lower north shore, where building approvals remain low and council laws severely restrict new development.
CoreLogic research director Tim Lawless said blue chips areas were leading a recent bounce in Sydney home values.
It is no surprise then that the Woollahra council area, including Bellevue Hill, Vaucluse and Point Piper, is expected to have the country’s priciest houses in 2030: the median house price in the area will be $7.48 million.
Mosman houses will cost about $6.8 million, on average, while the typical northern beaches house will cost $5 million if historic growth trends continued.
CoreLogic head of research Tim Lawless said these areas have been leading the recent resurgence in the housing market and tended to show the most consistent growth in prices over the long-term.
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Woollahra LGA prices increased by an average annual rate of 7.2 per cent over the past 10 years, Mosman by 6.4 per cent and northern beaches prices by 6.8 per cent.
“These areas are blue chip real estate and have been (leading) the real estate market recovery … they tend to be the areas that grow first,” Mr Lawless said.
Realestate.com.au chief economist Nerida Conisbee said there was a popular misconception that house prices doubled every seven years. “It usually takes a lot longer,” she said.
The past performance of a market was no guarantee of future growth, she added.
Economist Nerida Conisbee said past market performance was no guarantee of the future.
“It’s almost impossible to predict exactly what prices will be because a lot of things can change, but Sydney is likely to record strong growth in prices because of limited housing supply and strong migration,” Ms Conisbee said.
“Looking to the long-term, buying real estate makes sense because you get more (from your investment) than if you’re renting and buying other assets like shares.”
Parramatta’s median house price was expected to be at least $2.1 million in 2030 if historic growth continued, while a house in Liverpool will cost $1.26 million, up from $740,000 currently.
Houses in the Penrith council area, which at a median of $650,000 are currently among the cheapest in Sydney, will cost a much dearer $1.26 million in 2030, with average annual average price growth in the region currently at 6.8 per cent.
