Sydney’s property owners have enjoyed another positive year overall for prices growth although results have been typically mixed between regions, price ranges and dwelling types.
The key driver of the surge in Sydney house prices over recent years has been the steep decline in mortgage rates that has provided home buyers with historically favourable borrowing conditions.
Since the beginning of the current easing cycle in official interest rates in November 2011, the Sydney property market has clearly outperformed the other capitals with the median house price now over $1.1 million.
The latest data from the ABS reports that the average loan for a home purchaser in New South Wales increased by 4.5 percent over October to $474,647.
October’s result however remained 0.4 percent below that recorded over October 2015 and well below the peak average loan of $484,571 recorded over November 2015.
The Sydney Home Loan Affordability Index that measures the proportion of income required for the average home loan repayment has also improved lately with the index falling to 91.5 over the September quarter.
This was the lowest measure since June 2015 and well below the recent peak of 102.6 recorded over the December quarter 2015.
The Sydney median house price has surged by 69.3 percent since the December quarter 2011 fuelled by the lowest interest rates on record.
NSW home buyers remain active despite record prices with the number of home buyer loans approved over the year ending October 2016 increasing by 1.9 percent or 2327 higher than the number approved over the same period the year before.
Although the Sydney housing market remains positive for home owners, the strong prices growth of recent years has clearly marginalised first home buyers who generally face a bleak outlook with affordability for this group continuing to decline.
The ABS reports that just 1327 NSW first home buyer loans were approved in October which was the lowest number on record for that month.
The September result was also the lowest recorded for that month in the series.
The number of first home buyer loans approved over the first 10 months of 2016 was 9.2 percent lower than that recorded over the same period in 2015.
And the average NSW first home buyer loan now stands at $396,500 – the highest monthly result ever recorded and $20,000 higher than borrowed over October the year before.
Subscribe & don’t miss a single episode of Michael Yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to Michael Yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.