Homeowners turn asset rich as gains in property values outpace wages

Gerv Tacadena| Your Mortgage| 20 August 2021

https://www.yourmortgage.com.au/mortgage-news/homeowners-turn-asset-rich-as-gains-in-property-values-outpace-wages/278436/

Properties in a third of suburbs have outpaced annual wages in property price growth, according to new data from Domain.

According to the report, 95% of Australian suburbs have clocked annual gains in house prices over the year to June 2021. Of these suburbs. 33% recorded gains that were more than the annual household income.

Domain senior research analyst Dr Nicola Powell said the phenomenon has made homeowners wealthier, given their assets have grown in value.

“It is this wealth effect that has underpinned the stronger than anticipated economic recovery prior to the current Delta outbreak,” Dr Powell said.

New South Wales reported the highest share of suburbs where property price gains have outpaced wages at 55%.

The state also accounted for 18 of the 20 suburbs nationally where price gains outpaced income.

Dr Powell said the top 20 suburbs reflect the ongoing demand for homes in cities and in lifestyle coastal pockets.

“This is evident in the flow of residents from our capitals and into regional lifestyle locations, as well as keyword searches placing importance on particular home amenities or luxury additions that boost our lifestyles and how we use our homes — such as a pool and study.”

Taking the top spot was Sydney’s exclusive Dover Heights. Over the year, the median value of homes in the suburb increased by a whopping $1.27m.

This was more than seven times higher than the annual household income at $174,491.

Dover Heights is just one of the 13 suburbs in the list where prices have gone up five times the annual household income.

Top 20 Suburbs where annual house price growth exceeded household income, by dollar difference
State	Suburb	Postcode	Region	Annual change in house price	Estimated annual household income	How much more your home increased compared to your income.
NSW	Dover Heights	2030	City and East	$1,265,000	$174,491	$1,090,509
NSW	Bronte	2024	City and East	$1,220,000	$153,767	$1,066,233
NSW	Northbridge	2063	Lower North	$1,050,000	$192,510	$857,490
NSW	Seaforth	2092	Northern Beaches	$925,000	$194,813	$730,187
NSW	Mosman	2088	Lower North	$875,000	$145,189	$729,811
NSW	Bellevue Hill	2023	City and East	$850,000	$166,489	$683,511
VIC	Somers	3927	Mornington Peninsula	$731,750	$85,175	$646,575
NSW	Manly	2095	Northern Beaches	$786,000	$140,986	$645,014
NSW	Palm Beach	2108	Northern Beaches	$762,500	$121,528	$640,972
NSW	Byron Bay	2481	NSW Country	$655,000	$68,910	$586,090
NSW	Gordon	2072	Upper North Shore	$600,000	$133,157	$466,843
NSW	Killara	2071	Upper North Shore	$612,500	$145,880	$466,620
NSW	Naremburn	2065	Lower North	$585,000	$151,234	$433,766
NSW	Avalon Beach	2107	Northern Beaches	$545,000	$123,025	$421,975
VIC	Blairgowrie	3942	Mornington Peninsula	$469,500	$61,502	$407,998
NSW	Pymble	2073	Upper North Shore	$576,500	$177,888	$398,612
NSW	North Balgowlah	2093	Northern Beaches	$565,000	$179,557	$385,443
NSW	Bilgola Plateau	2107	Northern Beaches	$520,000	$138,108	$381,892
NSW	Maroubra	2035	City and East	$479,400	$99,134	$380,266
NSW	Cremorne	2090	Lower North	$514,000	$135,172	$378,828

Data provided by

The story was different with units, where price gains did not match those of houses.

In fact, of the 67% of suburbs that experienced growth in unit prices, only 10% witnessed gains overtake the annual household income.

“This reflects the underperformance of units, as national house prices have grown almost three times faster than units over the past year,” Dr Powell said.

Queensland had the highest share of suburbs with unit gains that were higher than household wages at 13%.

However, New South Wales still dominated the top 20 suburbs for units, with Milsons Point claiming the top rank.

Over the year, the median price of units at Milsons Point have grown by $508,500, close to three times higher than the annual household income of $178,867.

Top 20 Suburbs where unit prices exceeded household income, by dollar difference
State	Suburb	Postcode	Region	Annual change in unit price	Estimated annual household income	How much more your home increased compared to your income
NSW	Milsons Point	2061	Lower North	$508,500	$178,867	$329,633
NSW	Little Bay	2036	City and East	$351,500	$117,498	$234,002
NSW	Fairlight	2094	Northern Beaches	$299,000	$150,831	$148,169
QLD	Sunshine Beach	4567	Sunshine Coast	$212,500	$77,067	$135,433
NSW	Darling Point	2027	City and East	$295,000	$170,749	$124,251
NSW	Rose Bay	2029	City and East	$250,000	$130,797	$119,203
NSW	Double Bay	2028	City and East	$260,000	$142,656	$117,344
NSW	Woolloomooloo	2011	City and East	$213,000	$103,279	$109,721
QLD	Coolum Beach	4573	Sunshine Coast	$181,000	$72,984	$108,016
NSW	Kingscliff	2487	NSW Country	$176,000	$70,810	$105,190
NSW	Terrigal	2260	Central Coast	$200,000	$96,658	$103,342
NSW	Queenscliff	2096	Northern Beaches	$233,500	$135,172	$98,328
NSW	Yamba	2464	NSW Country	$146,250	$50,258	$95,992
NSW	Narrabeen	2101	Northern Beaches	$181,500	$91,074	$90,426
VIC	Blackburn	3130	Outer East	$194,300	$104,380	$89,920
VIC	Geelong	3220	Geelong	$162,500	$82,796	$79,704
QLD	Noosaville	4566	Sunshine Coast	$132,000	$66,255	$65,745
QLD	Buddina	4575	Sunshine Coast	$145,000	$79,540	$65,460
QLD	Golden Beach	4551	Sunshine Coast	$108,000	$58,145	$49,855
QLD	Mooloolaba	4557	Sunshine Coast	$118,000	$68,555	$49, 455