Where will the real estate market be in 25 years time? | Sky News [Video]

Sure property values are flat or falling at present but where will our property markets be in 25 years time? What's Next?

It’s no secret that property along Australia’s east coast is seriously unaffordable especially for first home buyer so how high can prices go?

Believe it or not, the median house price in Sydney could be over $6million and the median apartment price in our harbour city could be close to $3.5 million in 25 years’ time.

Now before you say “NO that can’t be! Housing is already unaffordable!” watch my recent interview on SKY News Real estate as I explain why this could be the case.

Watch as I explain

Over the past 25 years, the median house value nationally has risen by 412% – an annual growth rate of 6.8% or $459,900 

  • Melbourne had the highest average annual price growth – 8.1%
  • Sydney 7.6%
  • Perth – 6.7%
  • Hobart – 6.5%
  • Darwin 6.3%
  • Canberra – 6.0%
  • Brisbane – 5.9%
  • Adelaide – 5.9%

Some trends over the last 25 years

  • Strong housing markets have boosted household wealth over the last quarter of a century.
  • The average mortgage size has increased at roughly the same pace as housing values
  • With mortgage rates being at such a low setting, home loan serviceability measures have improved over the past decade, despite substantial rises in housing values.
  • Households need longer to save for a deposit and more FHB’s are seeking help from the bank of mum and dad
  • FHB’s are a smaller proportion of buyers – was 22% but has been declining since 2000 – now around 17.5% of the housing demand.
  • While first home buyer participation has faded, investors have become a larger contributor to housing demand.
  • As the population grows, the urban form of our cities has densified – trading backyards for balconies and courtyards

So what’s ahead for property values?

If property prices were to rise at the same rate as the past twenty five years, Australia’s median house value would reach $2.9 million by 2043. future

Here’s what Aussie’s report forecasts:

  • Sydney house values $6.3 million
  • Melbourne $5.8 million
  • Canberra $2.9 million
  • Perth $2.5 million
  • Hobart $2.4 million
  • Brisbane $2.3 million

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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au

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