Latest news with #RayWhiteGroup
Sydney Morning Herald
2 days ago
- Business
- Sydney Morning Herald
The type of housing cost that just soared 75 per cent in five years
The cost of land for housing development has skyrocketed by 75 per cent over the past five years, pushing homeownership further out of the hands of average potential buyers. The median development site cost has risen from $4.8 million in 2020, to $8.5 million this year, Ray White analysis of Real Capital Analytics data shows. It comes as construction costs remain elevated from their pre-COVID-19 levels, putting further pressure on affordability. Ray White Group chief economist Nerida Conisbee said it would take considerable time before building costs fell enough to make new housing genuinely affordable for average buyers. 'Land costs haven't come back down and what's happening is developers want to build, but they can't do it affordably,' Conisbee said. 'We're not seeing the crashes in the market we previously saw so we're in a kind of holding pattern.' In past economic downturns, rising interest rates would put pressure on some owners of development sites, forcing them into distressed sales at reduced prices. But this time was different, and Conisbee said many had built financial buffers while interest rates were at record lows, and developers have been in a better position to hold onto land. They were also entering into joint ventures when finances were squeezed. Changes to how lenders operated were also helping developers hold on to their assets, banks were holding off on forced sales for struggling developers, and were more likely to offer relief measures. It comes as the federal government aims to deliver 1.2 million homes in five years to address the housing affordability challenge.
The Age
2 days ago
- Business
- The Age
The type of housing cost that just soared 75 per cent in five years
The cost of land for housing development has skyrocketed by 75 per cent over the past five years, pushing homeownership further out of the hands of average potential buyers. The median development site cost has risen from $4.8 million in 2020, to $8.5 million this year, Ray White analysis of Real Capital Analytics data shows. It comes as construction costs remain elevated from their pre-COVID-19 levels, putting further pressure on affordability. Ray White Group chief economist Nerida Conisbee said it would take considerable time before building costs fell enough to make new housing genuinely affordable for average buyers. 'Land costs haven't come back down and what's happening is developers want to build, but they can't do it affordably,' Conisbee said. 'We're not seeing the crashes in the market we previously saw so we're in a kind of holding pattern.' In past economic downturns, rising interest rates would put pressure on some owners of development sites, forcing them into distressed sales at reduced prices. But this time was different, and Conisbee said many had built financial buffers while interest rates were at record lows, and developers have been in a better position to hold onto land. They were also entering into joint ventures when finances were squeezed. Changes to how lenders operated were also helping developers hold on to their assets, banks were holding off on forced sales for struggling developers, and were more likely to offer relief measures. It comes as the federal government aims to deliver 1.2 million homes in five years to address the housing affordability challenge.
Sydney Morning Herald
27-05-2025
- Business
- Sydney Morning Herald
Who's the breadwinner? In Perth, it's probably your house
Perth is the only place in Australia where houses earned more than people, with average prices surging by $95,022 over the past year – climbing from $812,482 to $907,504. Ray White Group senior data analyst Atom Go Tian said Perth residents seemed to have the best of both worlds. 'Not only do they earn the second-highest annual income across the country, but their houses made the biggest gains in the last 12 months,' he said. 'Even Canberra with annual incomes of $93,351 couldn't match what Perth houses made.' Tian said in Adelaide it was neck and neck with both annual personal income and house price growth sitting at just over $63,000. Brisbane homeowners were just keeping their noses in front, earning roughly $2000 more than their houses appreciated. 'However, the gap widens from here with Melbourne and Canberra having the greatest disparity between personal income and house price growth,' he said. 'Melburnians made 5.5 times more than their properties, while Canberrans pulled in five times what their houses did.' At a suburb level Perth dominated the list of suburbs where houses earn more than people. Carabooda-Pinjar, which has a median house price of $1.58 million, recorded the largest difference between annual house price gain and income with a net positive increase of $95,272. It was closely followed by Nedlands-Dalkeith-Crawley ($93,000), City Beach ($80,514) and Claremont ($63,293). 'Even among Perth's strongest performers, house prices remain relatively accessible compared to Sydney and Melbourne,' Tian said.
Sydney Morning Herald
27-05-2025
- Business
- Sydney Morning Herald
The locations where houses make more money than their owners
Sydney's house prices jumped $52,006, compared to annual earnings of $78,512. In Brisbane, there was just a $2411 difference in house price gains and wage income, while in Adelaide the gap was only $227. The last time wages outstripped house prices was during the market slowdowns in 2023 and 2019, senior data analyst with Ray White Group Atom Go Tian revealed. Ray White chief economist Nerida Conisbee said the Sydney and Melbourne markets had been a lot more sensitive to interest rate rises than out west. Sydney and Melbourne had been hit by affordability issues, meaning house price gains fell behind wages, especially in more expensive areas. Loading 'The top end of the market is definitely seeing a slowdown,' Conisbee said. 'We normally think of people buying expensive houses not needing big mortgages, but some do, and interest rate rises now mean it's harder to get finance.' But Perth's housing market seemingly shrugged off the challenges as a lack of new housing created more competition over properties for sale in Perth, meaning prices kept booming, she said. Perth's market was also buoyed by its recovery after the mining boom and bust, she said. 'There is a lack of houses in Perth because of the really big construction problems,' Conisbee said. 'Construction costs have continued to increase … and there have been a lot of competing demands. 'There's been a bit of catch up as well because for 10-15 years house prices fell in Perth, so prices have jumped to get back to where they should have been.' The last time Sydney and Melbourne were in a property boom three years ago, data showed some wealthy neighbourhoods recorded house price rises of more than $1 million, earning more than 10 times pay packets. But the opposite was now happening, with home owners most likely to earn more than their houses in affluent suburbs such as Victoria's Toorak and South Yarra, and Sydney's Balmain, the Ray White research showed. House price gains also trailed incomes in regional areas in NSW, Victoria, Queensland and Western Australia. Loading Regional NSW's house prices jumped $26,712 while wages sat at $60,073. Regional Victoria's house prices were up by a more subdued $11,920 with wages at $62,300. AMP chief economist Dr Shane Oliver said property markets in Sydney, Melbourne, Hobart and Canberra had been weaker over the past 12 months as they had hit their peaks much earlier than Perth. With 13 interest rate increases between May 2022 and September 2023, and only two decreases this year so far, it was unclear whether any further cuts would have a big enough impact for house price gains to eclipse wages there over the next 12 months, he said. House prices had kept rising due to a lack of supply and strong population growth, albeit at a slower pace than during the COVID boom, he said. But he had a warning for the still relatively affordable west coast market. 'Affordability was already worse in these [east coast] capitals so it left them more vulnerable to higher interest rates,' Oliver said. 'Perth will start to run into trouble as affordability issues hit.'
The Age
27-05-2025
- Business
- The Age
Who's the breadwinner? In Perth, it's probably your house
Perth is the only place in Australia where houses earned more than people, with average prices surging by $95,022 over the past year – climbing from $812,482 to $907,504. Ray White Group senior data analyst Atom Go Tian said Perth residents seemed to have the best of both worlds. 'Not only do they earn the second-highest annual income across the country, but their houses made the biggest gains in the last 12 months,' he said. 'Even Canberra with annual incomes of $93,351 couldn't match what Perth houses made.' Tian said in Adelaide it was neck and neck with both annual personal income and house price growth sitting at just over $63,000. Brisbane homeowners were just keeping their noses in front, earning roughly $2000 more than their houses appreciated. 'However, the gap widens from here with Melbourne and Canberra having the greatest disparity between personal income and house price growth,' he said. 'Melburnians made 5.5 times more than their properties, while Canberrans pulled in five times what their houses did.' At a suburb level Perth dominated the list of suburbs where houses earn more than people. Carabooda-Pinjar, which has a median house price of $1.58 million, recorded the largest difference between annual house price gain and income with a net positive increase of $95,272. It was closely followed by Nedlands-Dalkeith-Crawley ($93,000), City Beach ($80,514) and Claremont ($63,293). 'Even among Perth's strongest performers, house prices remain relatively accessible compared to Sydney and Melbourne,' Tian said.
