What a difference a decade makes.
When I first moved to Australia in 2007 I chose to live in Brisbane.
I could have chosen Melbourne, I could have chosen Sydney, or I could have chosen anywhere else. Back in those days, house prices from city to city were not really significantly different. The first time I wrote about house prices on this blog was in August 2009 in a post called The Cost of Living in Australia: House Prices.
That post included the following beautifully laid out information about median house prices.
If I use Brisbane as a base, then Sydney house prices were 27% higher and Melbourne’s just under 9% more expensive than where I chose to live.
About six months ago I was watching late-night TV, some kind of business current affairs program in which Australia’s economy was being discussed. One of the participants in this debate was Cameron Kusher who is Head of Research at CoreLogic. What he doesn’t know about house prices, demographics, trends and economics is probably not worth knowing.
He made several very interesting statements, such as:
- In the last five years, two thirds of all jobs created in Australia were in Sydney and Melbourne
- House prices is Sydney have doubled since the global financial crisis of 2008
- In Melbourne, during the same period, house prices have gone up by 80%
- Here in Brisbane, again during the same period, house prices have gone up by just 14.7%
- The average price of a house in Sydney is now just over $1 million
- Whereas here in Brisbane, the average price is about $520,000
So nevermind 27% and 9%, houses in Sydney are now worth double that of those in Brisbane and in Melbourne they are now around 70% more expensive than in Queensland’s capital.
The general suggestion that was made on the program was that Australia is one country with two distinct economies; that of Sydney and Melbourne being one of them, the rest of Australia being the other.
Since that program in October of last year, this debate has intensified, fuelled by an article just a couple of days ago in which a nurse living in Sydney complained about not being able to afford the deposit for a house. You can read his story over at news.com.au, and the comments he received at the bottom make for interesting reading.
Many were suggesting that he get out of Sydney if he wants to buy a house. Others were pointing out that if all the nurses left Sydney, who would look after the sick?
You can see why this is such a hot topic.
Cameron Kusher though, just last week, released a comprehensive blog post about the current situation which I think anybody considering moving to either Sydney or Melbourne should look at. I’ll give you a link in a minute, but here are the highlights of what Cameron had to say.
First though, just check out his chart detailing house price changes in Australia for each capital since December 2008.
So why are Sydney and Melbourne house prices racing so far ahead of everybody else’s?
In Kusher’s excellent article, he talks about population growth in each of the states and territories of Australia. In terms of numbers, and again since December 2008, these are the figures for the top four:
- Victoria – 754,757
- New South Wales – 724,102
- Queensland – 568,922
- Western Australia – 408,244
All up, the total population increase in all of our states and territories in Australia for the period was just over 2.6 million. My guess is that about 1.8 million of those were new migrants. Why? See Australia: Top 10 Source Countries for Migrants 2015–16.
As you can see from the above figures though, almost 1.5 million of Australia’s population increase occurred in New South Wales and Victoria. What Cameron also points out though is that in NSW, 65% of the population live in Sydney and in Victoria a massive 76% of the population live in Melbourne.
In Queensland, less than half of the population live in Brisbane.
It is easy to see what is driving these massive house price increases in both Sydney and Melbourne when you look at these figures. It’s simple really, demand is outstripping supply.
I’ve only skimmed the surface of Cameron Kusher’s full post, and I highly recommend that you read it all in its entirety. To do that, visit…
Conclusion for new migrants
Yes, when I came to live in Australia back in 2007 I chose Brisbane. I could have chosen Sydney, I could have chosen Melbourne, I could have chosen any of the other major capitals or even a smaller town. Australia was booming, all of it, jobs seemed to be readily available everywhere.
These days, many new migrants choose either Sydney or Melbourne, mainly because that’s where the work is. This is fuelling house price rises that are now pretty much out of control. Unless you are quite wealthy, it’s going to be difficult to truly live the dream in these two cities.
On the other hand, Brisbane, Adelaide, Hobart and Perth can offer much more affordable housing, mostly on much bigger plots. If you can find work in any of these cities, it might be a good idea to go there instead if you want to enjoy a significantly better lifestyle here in Australia.
The future
No, I can’t predict the future, sorry. But…
The last time I wrote about Commsec’s Australian State of States Report was in July 2015, at that time Tasmania came eighth, or in other words, last. I’ve just checked Commsec’s latest report (their PDF will open in a new tab) and Tasmania is now fourth behind New South Wales, Victoria and ACT.
A great achievement in less than two years for Tassie, and Commsec say that it is population growth providing the momentum. Queensland was and still is in fifth position, but are now second ranked in dwelling starts and population growth is picking up; it’s the fastest it’s been for almost 2 years.
Are the people of Victoria and New South Wales cashing in their chips and moving to their neighbouring states of Tasmania and Queensland?
It’s just a thought. And if you are moving to Australia in the near future, you will probably need to put a great deal of thought into where you go. Sydney and Melbourne are the popular choices right now, but there are pros and cons. Maybe it’s time to look elsewhere.
Where would you choose?
Hi Bob,
My name is Jigna. We are currently in USA. We are four in our family. Myself-my husband and my 20 year old daughter and 14 year old boy. Because of some circumstances we might move to Australia. We have visa to move there. Enjoy reading your blogs. Thanks. I have many questions. I found some answers from your blog. I don’t know what are our priority but it feels like all questions are important. Okay here it goes….
1. Where to live? According to your blog I can say Sydney and Melbourne has high cost of living. My 1st option was Melbourne and after reading the housing cost I might prefer to go to Perth or Canberra, Brisbane is our third option.
2. My daughter is 20 she will be 21 soon, is it a wise decision to move at this age? How are the college there compare to USA?
3. How hard is to get job there?
For now only three questions. Thanks Bob.
Hi Jigna, glad to hear you have been enjoying my blogs.
Where to live is the big question here; Sydney and Melbourne as explained above offer the most job opportunities but are quite expensive city’s. I always suggest people should really try to go where the work is, because all cities will seem expensive if you don’t have an income.
For that reason I would discount Perth at the moment, they seem to be going through a very bad time for employment, on the other hand I hear that Canberra is doing very well these days. I like Brisbane, that’s why I live here, but you would need to do some research to see whether you might secure work here for whatever it is that you do. My page Getting a Job or a Sponsorship can help you with that.
Also, just to underline how difficult it can be to get a job here, have a read of…
https://www.bobinoz.com/blog/17033/whats-it-really-like-trying-to-find-a-job-in-australia-2015/
And the comments that have been made there.
As for your daughter, I know of a family with two girls who moved here four years ago, they were age about 16 & 18 when they arrived. They are both still here and they love it. Both of them also went to college.
So whilst I couldn’t accurately compare Australian colleges to those in the US, I think ours are all right and I think your daughter will be fine. Of course, that does depend on your daughter and whether or not she really wants to come here. Good luck with your plans, Bob
Thanks for answering my questions. I will read the link you have given me on this. If I have further questions I will come back to you :). Thanks.
Jigna.
Sydney house prices will most likely level off at some point, like they did in the early 2000s after a period of massive price growth that started in the late 90s.
What happened during the period from around 2003 until about 2013 was that property prices in the rest of the states started to catch up to Sydney.
That will likely happen again. I bought my Sydney house in 2013 when the market in Sydney was still pretty anemic and melodramatic types were claiming that the Australian property market was a bubble ready to pop. Sydney house prices have doubled since then. My next move will likely be to sell my house in Sydney and buy in Brisbane. I’m guessing that the majority of the price growth in the next 10-15 years will be in capital cities outside Sydney and Melbourne.
Well, in that case, may I be one of the first to welcome you to Brisbane, or maybe I’m jumping the gun a bit there. I tend to agree with you as well, Sydney prices and probably Melbourne’s as well must surely have pretty much peaked by now, it’s hard to imagine they can get much higher.
You’d probably be able to buy a wonderful house here in Brisbane and still have change. Perth prices are quite quickly falling, I can’t imagine people rushing to Adelaide at the moment with jobs being so hard to find there, so Brisbane may actually be a pretty good choice if you’re looking for capital growth on your house purchase.
The weather is pretty good as well.
Hi, i love your blog- quite informative.
My husband and i are looking to relocate through skilled migration from Kenya. We are accountants. We have a concern, Australia might remove accounting from 2017-2018 skilled migration list. Might we be too late to apply given that ours is a long process, sit for English exam, apply for skills assessment from CPA Australia before lodging EOI. Perhaps they might have changed their list before we lodge the EOI or they might have even gotten the needed accountants from 2016-2017 list? What would you advice?
My advice is speak to a MARA registered migration agent as quickly as possible to see how soon you can put your application in. The sooner you get on with it, the better. Whilst the government can, if they want to, change the occupations on these lists at any time they want, they usually make the changes on 1 July each year.
So you have three months in which to get your application in, my understanding is that even if they remove an occupation after your application has been received, they will honour it, but that’s something that a MARA agent will also be able to confirm.
To find a MARA registered migration agent, see my page about Migration agents.
Good luck, Bob
Hi Dove. I would be very interested in knowing how your case went.
A Melbourne boy born and bred I would not like to live in N.S.W. and particularly Sydney. It may be a prettier city than Melbourne but I think it lacks soul-it’s all business. Junk mail capital of OZ, corrupt police-no thanks. Was born in Victoria and will die here. Best state in Australia.
That sounds like a big thumbs up for Victoria then 🙂 Sydney maybe prettier, but Melbourne doesn’t have lockout laws. Long may that continue, people should be allowed to have fun.
Such a great article Bob. I heard they are looking at bringing in 40 year home loans for NSW. So if you finally save up the $100,000+ deposit by living with your parents until you are 30, then you can enjoy paying off that baby until you are well past the current retirement age haha. That is providing you work that whole 40 years. My thoughts actually go out to people who can’t live with parents or do not receive any money or property during that sad time were the next generation passes on.
I know many people who have been setup for life from their parents, and previous generations who could afford houses and had greater jobs opportunities. Living in Adelaide the housing is very affordable here, but at posted in the comments, the employment situation is certainly not, unless you have job security, which is really a made up word.
My thoughts are also with people who are 17 and just out of high-school, sure there are plenty more ways to earn money with technological advancement, and things are far more efficient, however the gap between minimum and average wages to the cost of housing has distanced itself beyond records, and who wants to pay someone else’s mortgage off and fund their retirement and holidays? I certainly do not, so I hope they make the most of the situation, set goals, and stay focused on finding a well balanced life.
Thanks Scott, glad you liked it. As you have most certainly implied, forty-year mortgages are not really the answer and the notion that anyone could be in permanent full-time employment for such a long period is ludicrous in today’s world. As you say, job security no longer exists and the way things are heading it’s more likely to be only short-term contracts, and, so I’ve heard, even one day contracts will become a thing in the near future for many people.
How anyone can plan and budget under those conditions I don’t know. Yes, you’ve got to feel sorry for the kids coming through to the workplace around now, it’s going to be very difficult for most them if they don’t get parental help to ever get on the property latter, certainly in Sydney or Melbourne. It’s a fast changing world though, so maybe something will come up, after all, who would have said, even just a few years ago, that people could make a full-time living posting photographs of themselves on a site called Instagram?
I am just dipping in and out of this site whilst doing some work and had noticed this post My comments are a bit off the cuff so to speak …I dont disagree with much of what you say Bronwen as I dont know about the employment problems and cost of living in many places, just what I have, which is a general feeling I agree with some of what you say and with Bobs overview of Melbourne. I feel homes can still be had and at reasonable prices.dependant on your view of reasonable, You may not be within walking distance or a short hop on a train of your work but its still accessible As an example Officer with its new development and the newly created Minta Farm suburb just across the road so to speak… The house prices here are well below the median (if the median can ever be used as its a daft equation sometimes) Similarly Cranbourne and I imagine many of the other 16 new suburbs will start off with lighter prices, You may just have to travel a touch more for the CBD but then of course most of the jobs are not in the CBD….
Melbourne when you work it out is massive and just like say Wollongong perhaps as an example is say an hour and thirty drive from Sydney, it may be Melbourne has its equivalent say the Mornington Peninusla as a good example its an hour away but still called Melbourne Metro area, Friends have just bought a house, well land 750sq with a four bed 2 car, to be built home for $589 on Labour day (realtors will do anything for a sale) so its achievable. Some may same 589 is high but its below the Melbourne median which looks like its now above 750. Officer according to real estate checks in at $440 median I think that’s very reasonable.
My point is not to put folk of coming to Australia because of scary house prices. I landed a year and a half ago looking at Point Cook $650 Mortgage free nice house pool but as ever we looked elsewhere as I did not like the west side and the prices kept rising and finally when one realtor said we want just over a million I remember saying to my wife “Are we going into silly territory now” . Plus who buys a Camry for 30,100 its 29,995 eg the house should have been 995.000 not 1,010,000. With the new stamp duty changes and PRs arriving have fist time buyer status its achievable and they should not be put off. Back to work!
Sorry Mark, just seen your comment in reply to Bronwen (below) which you made before I answered. Good tips about those more reasonably priced areas in Melbourne, an hour away from the city doesn’t sound too bad.
I’m wondering whether there are similar areas still left in Sydney, but I doubt it. Maybe somebody who knows Sydney well could let us know?
A tricky one as all the states have lifestyle pro’s and cons. We migrated from the Uk three years ago and lived just outside of Hobart. Gorgeous town,friendly people,stunning scenery and very reasonable house prices. We bought a house near the Beach and were very happy,for a while…..
However the dream was not quite the dream we had thought. Tasmania has very little jobs ,with a population that is noticeably undereducated and this holds many back. We are in the uni sector and eventually did get jobs but only on revolving six month contracts. The stress of this plus the isolation of Tassie made us re think. We now have sold our home by the sea and have found good well paid jobs in Canberra and about to buy a home in NSW just over the ACT border,where the real estate prices are cheaper. My advice is if you are not retired or cashed up,Or got a permanant job to go to,Tassie might not be for you. Adelaide is beautiful with a good lifestyle and semi affordable real estate but again has an unployment problem. With scorching summers and cold winters. Brissie is a gorgeous dynamic and sophisticated city with pockets of real estate affordability. Can’t comment on the employment situation but like anywhere better to go to a job rather than arrive and just look for one. However not on the beach,though near gorgeous stradbroke and morten bay island. Our problem was the climate, far too hot and humid for us! When we were there we found we spent most of the summer indoors in the aircon as the heat and humidity was unbearable,so if you like those conditions then Brissie with its many attractions could be for you. Melbourne and Sydney in our eyes are fantastic cities but and its a big but even with good jobs the chances of affording a reasonable home could be slim but if you are okay with renting and working in the city you will have a blast. Many rural towns in all the states offer fantastic lifestyles but again if you need to work jobs are scarce but great if you are retired or cashed up and don’t need to work. We are very happy working in ACT and commuting in from NSW just over the border and are looking forward to a retirement on the gorgeous South coast somewhere. Obviously these opinions are formed by our own personal perspective and your thoughts may be different depending on what you enjoy and are looking for. The Aussie dream is still alive and well ish but you now just have to look that much harder for it,good luck everybody !
An excellent roundup Bronwen, thank you for taking the time. As you say, it is difficult, almost everywhere has its pros and cons. I can’t tell you how many times I’ve had someone come to this website and ask in the comments ‘Can you tell me which city to go to which has lots of jobs and a low cost of living?’
As we know, it doesn’t work like that. The cheaper the housing the fewer jobs available, and then there’s Sydney and Melbourne.
I’ve lived in Brisbane since 2007, and unlike yourself, I absolutely love the climate here, it’s perfect for me, but I know it’s not everybody’s cup of tea.
I’m glad you have found something that suits you well in Canberra. It may be miles from the beach, but most of the people who do live there seemed to really like the place, I get a lot of positive comments about life in ACT. As you say though, now is not the time to turn up somewhere and look for a job, it’s always best to have a job to go to first, and if you can get one somewhere where housing costs are low, that would be popadoodledandy.