The first time I compared the cost of houses between England and Australia was in February 2009 when I wrote….
On that occasion there were lots of news headlines going around suggesting Australia’s houses were among the most expensive in the world. I didn’t think so, having moved from England in November 2007 on an exchange rate of $2.26 AUD to the pound.
Then in August 2009 I wrote about it again in my post……
That post turned out to be the most controversial and most read on this entire blog. Not everybody agreed with my price comparisons or my conclusion. That article was based on multiples of earnings rather than the current exchange rate, so AUD/GBP wasn’t mentioned.
By doing it that way it was a better guide to the affordability of housing in Australia for Australians, but not a good way of doing it for those intending of selling their English home to buy an Australian one. For the record, the exchange rate was about $1.76 AUD to the pound at that time.
Then in March this year I wrote ……
This post was based almost entirely on the cost of houses using the exchange rate at the time, which was about $1.65 AUD to the pound. Yet astonishingly the final conclusion in that one suggested that Australian houses could well still be cheaper than those in the UK.
I’m sure you can see that there’s more than one way of comparing house prices and also that this exercise is always going to be a moving target. That’s why I keep coming back to it.
So what’s new in this fourth look at house price comparisons?
Well, the pound continues to fall against the AUD; it went as low as $1.58 to the pound the other day. House prices in England look set to fall over the coming 12 months after a brief miniboom of late. So not much change there.
But this is different……
According to the Australian Bureau of Statistics, last year, that’s the 12 months leading up to June 2010, “Preliminary estimates show that the price index for established houses for the weighted average of the eight capital cities increased 18.4% in the year to June quarter 2010.”
But since June, the Australian housing market hasn’t been so lively. When I first arrived here I’m sure the average time to sell a house was around seven weeks. Now some houses are sticking for months. Here’s what’s been said recently about Australian real estate….
- NAB (National Australia Bank) “the national average house price is forecast to rise by only 1.5 per cent in the next year.”
- RPData “capital city property prices fell 1.2 per cent for the three months to August.”
- The Sydney Morning Herald “Brisbane house prices slumped 2.3 per cent, seasonally adjusted, to $434,000, in the three months to August.”
- PerthNow says sellers are being forced to reduce prices. “House prices in Perth are on a downward trend with sellers reducing asking prices by 6 per cent as the local market floods with properties for sale, according to the Real Estate Institute of Western Australia.”
Yes, the housing market seems to have changed somewhat since June 2010. Many expect the year to June 2011 to be flat in terms of house price increases.
So I expect buying a house here in Australia to continue to offer better value than buying a house in the UK for some time to come. Even more so if the pound can start to fight back against the AUD.
But let’s move away from the Australian major cities for a while, and take a look at house prices around the rest of Queensland. These prices were provided by REIQ and I got them in a free pull-out provided by the Sunday mail here in Australia. They are all median prices as at June 2010.
Please remember that almost all houses here, and these are prices for houses, are detached. Cheaper than these are what we call units. Units are equivalent to semi-detached, terraced or flats.
- Ipswich city $323,000
- Moreton Bay $399,000
- Toowoomba $289,500
- Bundaberg $282,000
- Fraser Coast $307,400
- Rockhampton $315,250
- Townsville city $375,000
And my favourite, Banana. Yes we have a town called Banana and you can buy a house there for $265,000.