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.
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 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?