Two-speed market shows path to more affordable housing
Did anyone call it? In three months, Sydney house prices have jumped 4.8 per cent and Melbourne by 4.1 per cent. For the emerald city, that's a third of the value lost during the 18-month downturn, from the mid-2017 peak.
In that time, house and unit prices in Brisbane, Canberra and Adelaide have dropped. For Australia's two biggest housing markets however, the last quarter has been a boon; Sydney now boasts a median house price of nearly $1.08 million and unit price of close to $695,000; Melbourne's new median prices are $855,000 and $521,000 respectively.
While established home prices have jumped, however, land prices across the country have dropped in the 12 months to June this year. According to the latest HIA-CoreLogic Residential Land Report released yesterday, greenfield land in Sydney has dropped 12.6 per cent per square metre; Melbourne's fell 7.4 per cent and Brisbane by 4.6 per cent.
While we've heard stories of land developers increasing lot prices since then as the market heats up, there's still a big gap between the cost of comparable new and second-hand homes in Australia at the moment.
Calls for planning reforms to fix economy, building industry
In the past week, both Stockland and Mirvac have warned Australia is racing toward a housing shortage. CoreLogic also let us know earlier this week that housing starts have fallen below their decade average, warning that Melbourne in particular will reach undersupply within 24 months.
REA Group chief economist Nerida Conisbee is arguing today that the path to addressing this issue, and in turn encouraging a boost in economic activity in Australia, is the relaxation of planning controls. Her argument is without this, we're just going to see more of the same housing price-bubble inflation in already expensive locations, while new dwelling construction continues to be disincentivised by heavy red tape.
...speaking of which, VIC Red Tape Commissioner Anna Cronin came out yesterday with the same message, saying the state could save $600 million a year by speeding up approval processes and slashing duplication.
NSW Better Regulation Minister Kevin Anderson also released his government's proposed building industry reforms yesterday, with a range of measures to improve transparency in the building and development process, and introduce new protections for consumers faced with building defect issues.
In bad news for owners of Mascot Towers and Opal Tower apartments, the new laws will not apply retrospectively; they're only valid on new-builds. This also won't be great news for anyone who falls victim to what has been tipped as the next big building defect issue: magnesite flooring, which was commonly used in apartments built from the 1960s through to the 1980s.
New Sydney airport takes off
The NSW government and Western Sydney and Aerotropolis Authority officially launched the Badgery's Creek airport project yesterday. It is scheduled to open in 2026.
Right now, the site is a huge expanse of cow paddocks. Hard to imagine that in a relatively short space of time, the precinct will be a new business and infrastructure hub surrounding Sydney's first 24-hour international airport. Sydney land may have dropped in the 2018/19 financial year, but that's unlikely to remain the status quo in south west Sydney.