Toronto and Sydney have fastest rising house prices

Sophie and Conrad Barrett with daughter Ella in their apartment in Petersham. Picture: Dylan Robinson

SYDNEY home prices have been rising faster than values in every major city in the developed world outside of Toronto, Canada.

An analysis of global real estate data compiled exclusively for the Saturday Telegraph revealed Sydney’s median home price grew 18.4 per cent over the past year, eclipsing New York annual growth of 11.5 per cent and London growth of 6.2 per cent.

Sydney growth was also higher than the 9.3 per cent jump in Tokyo prices, which got a boost last year partly as a result of preparations for the 2020 Summer Olympic Games.

The only major urban centre in a developed country with a similar bounce in property values was Toronto, which recorded growth marginally above Sydney’s at 19 per cent.

The analysis excluded cities with a population under one million.

Villa in
Begur is for sale at $740,000 — roughly the price of a Sydney unit. Picture: Sothebys International

Three-bedroom home on the Greek Island of
Rhodes is for sale at $770,000. Picture: Sothebys International

Sydney’s median home price remains more unaffordable than Toronto’s at 12.2 times the average household’s yearly income, according to a Demographia study.

The only city in the world where housing was deemed more unaffordable was land starved Hong Kong — but REA Group economist Nerida Conisbee said Sydney was in the same category as the Chinese city.

Like Hong Kong, Sydney housing has become increasingly unaffordable because geographic constraints and a decade of poor planning policies made it difficult for developers to release new housing, creating a shortage, Ms Conisbee said.

The impact of this legacy was evident when comparing Melbourne and Sydney prices, she said. Back in 2012, a typical Sydney apartment cost $30,000 more than one in Melbourne but the gap has since grown to $206,000, despite the Victorian capital’s similar-sized population and economy.

Four-bedroom home in
Millville, California for A$780,000. Picture: Sothebys International Realty

Three-bedroom house (near Johannesburg, South Africa) for $722,000 — or a typical, two-bedroom unit in Sydney.

The gulf in prices means homebuyers with a budget of about $650,000 to $750,000, roughly the average price of a Sydney unit, can nab large three- or four-bedroom houses in Melbourne’s middle-ring suburbs.

Homebuyers in other capitals get even better bang for their buck — the same budget could secure five-bedroom houses with swimming pools in both Perth and Adelaide or a three-bedroom house within 10km of the Brisbane CBD.

In Hobart, buyers can nab luxury waterfront homes for less than $700,000.

Even foreign investors were beginning to notice how much further their money could go outside Sydney, Ms Conisbee said.

This French chateau in Usson Du Poitou for about $770,000. Picture: Leggett

“Sydney is attracting a considerable amount of international investors but it’s nothing compared to Melbourne,” she said. “Part of the reason is the prices.”

Cohen Handler buyer’s agent Ben Handler has helped numerous foreign investors buy in Australia and said his international clients were getting increasingly spooked by Sydney’s high prices.

“Investors from America and especially from Europe are seeing how high the prices are and rethinking their decision to purchase,” he said. “The only investors who don’t seem mindful of the high prices are from China.”

MELBOURNE: This four-bedroom house in West Footscray sold for $770,000.

HOBART: Three-bedroom, waterfront house at Tranmere for sale at $690,000-plus.

PERTH: Five-bedroom house in southern Perth at $699,000.

International property listings highlight why some foreign investors may be growing reluctant — for the same price as a two-bedroom unit in Parramatta or the inner west, buyers can get a massive renaissance-style chateau in western France.

The same amount of money is also enough for a brand new three-bedroom villa on Spain’s northeast coast, a luxury villa on a Greek island or a grand four-bedroom house with a swimming pool in northern California.

Sydney units for sale within the same price range include a two-bedroom unit in the inner west suburb of Petersham, which owners Sophie Mackey, 37, and Conrad Bennett, 39, are taking to auction April 1 with a price guide of about $750,000.

Ms Mackey said she was proud of her 65sq m art deco home with timber floors and decorative ceilings but had decided to move her family to a bigger home with more space.

ADELAIDE: Five bedroom house at Bellevue Heights for $650,000 to $715,000.

BRISBANE: Four-bedroom house in Murrumba Downs for $675,000.

“Our daughter is growing up, we decided it was to get a backyard,” she said.

Her agent Rhonda Yim of Belle Property-Annandale said smaller homes were often selling for considerably more money in nearby areas. “Smaller one-bedroom units in areas like Stanmore have been selling for as much as $850,000,” Ms Yim said.

CoreLogic head of research for the Asia-Pacific Tim Lawless said Sydney policymakers could learn much from New Zealand’s example in tackling housing affordability.

Until late 2016, home values in Auckland were growing at a faster rate than in Sydney, but regulations requiring investors to stump up 40 per cent deposits helped cool the market.

“The Auckland market is now slowing, while Sydney values continue to surge higher,” Mr Lawless said.

Annual global home price increases

● Auckland 11%

● Hong Kong 10.8%

● London 6.2%

● Los Angeles 8.6%

● Melbourne 13.4%

● New York 11.5%

● Paris 4.4%

● Singapore -3%

● Toronto 19%

● Tokyo 9.3%

● Vancouver 14%

Source: CoreLogic, Zillow, MLS, Global Property Guide, Notaires de France