Sydney is arguably Australia’s most iconic city. The picturesque harbour city is blessed with natural beauty, it is an international business hub and a hotspot for both locals and immigrants. Sydney continues to lead the country in real estate price growth, a statistic many locals would prefer to live without. This is hardly surprising: the lopsided inflow of migrants combined with a range of economic drivers have led to the average person not being able to afford to buy a house in Sydney’s prized inner city suburbs.
Sydney will never rival the likes of Hong Kong, Manhattan or Mumbai for astronomical real estate price rises, but the city is subject to supply shortages, which inevitably drive prices up. This spring in Sydney, with 20% fewer houses cleared at auction than the same time last year, prices reached at auction have spiked dramatically due to increased competition among buyers.
What Brings People to Sydney
In recent decades, Australia has been a particularly attractive south pacific nation for new immigrants due to a booming economy, one that resisted the GFC, a huge resources sector and a lifestyle that is the envy of many countries around the world.
For the first time since 2006 immigration accounted for a greater slice of national population growth than childbirth. Overseas migration counted for 54% of Australia’s growth in 2015 and the population is expected to reach 25 million in 2018. For new migrants, Sydney is a natural choice thanks to the size of its economy. The suburban sprawl has really taken effect in the region, but this has equally pushed up the demand for prime location living within commuting proximity of the city centre.
Predicting housing bubbles, and their demise, is as reliable as forecasting US presidential victors or UK referendum results. The truth is, no one actually knows what will happen, but right now high prices are squeezing first-time buyers further out of the city, as Sydney’s housing boom looks set to continue.