Developers like AV Jennings, Australand and a host of their competitors don’t need statistics to tell you how bad the Sydney property market is and NSW for that matter.
Developers are abandoning the state for Victoria and Queensland or de-emphasising the importance of housing in the state while pursuing other projects, such as small shopping centres and commercial properties.
There’s just no certainty in NSW or Sydney, which is hurting the housing industry across the board because the state (and Sydney in particular) is the biggest market in the country (like it is for so many domestic activities)
Sydney’s underperformance is showing up in official figures which measure house price movements.
The Australian Bureau of Statistics (ABS) said yesterday that average house prices grew by an average 1.1 per cent across the country in the first three months of 2007, but Sydney house prices again struggled to the point where they went backwards.
The ABS said its House Price Index, which takes the average of the nation’s eight capital cities, grew 8.6 per cent in the 12 months to March (which nearly matches the growth in the dollar value of retail sales. That’s not an accurate comparison but more confirmation of how sweet the economy is at the moment).
But prices in the nation’s biggest housing market in Sydney fell by an average 0.4 per cent in the first quarter, and grew at just 1.5 per cent over the year to march.
With inflation in the year to March running at around 2.4 per cent, Sydney prices as a whole went backwards in real terms.
But that disguises the enormous differences between the booming Eastern, Northern and Southern beach side suburbs (and their neighboring areas) and the west and south west of the city where prices have fallen sharply amid a spate of mortgagee sales and repossessions.
The contrast between Sydney and the resources boom-fuelled Perth market was again telling.
Perth prices rose another 2.1 per cent in the first three months and by 32.1 per cent over the year. That’s actually a bit slower than the 2-3 per cent a month and 35 per cent a year rate of mid to late last year.
Prices in all other states and territories also rose in the quarter: Hobart led the way with a 3.8 per cent increase, followed by Brisbane at 2.9 per cent, then Darwin at 2.8 per cent, Perth, followed by Adelaide with a 1.7 per cent increase, Melbourne at 1.5 per cent and Canberra at 1.2 per cent.
The ABS said on an annual basis house prices rose in Perth (+32.1%), Darwin (+15.0%), Hobart (+10.5%), Brisbane (+10.2%), Canberra (+9.0%), Melbourne (+7.4%), Adelaide (+6.1%), and Sydney (+1.5%).
Even after this sluggish effort in Sydney housing affordability remains poor, as it does in WA (Perth), Queensland and Victoria.
Hobart is booming because of the demand for houses from people relocating from other states.
