Homeowners turn asset rich as gains in property values outpace wages

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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
StateSuburbPostcodeRegionAnnual change in house priceEstimated annual household incomeHow much more your home increased compared to your income.
NSWDover Heights2030City and East$1,265,000$174,491$1,090,509
NSWBronte2024City and East$1,220,000$153,767$1,066,233
NSWNorthbridge2063Lower North$1,050,000$192,510$857,490
NSWSeaforth2092Northern Beaches$925,000$194,813$730,187
NSWMosman2088Lower North$875,000$145,189$729,811
NSWBellevue Hill2023City and East$850,000$166,489$683,511
VICSomers3927Mornington Peninsula$731,750$85,175$646,575
NSWManly2095Northern Beaches$786,000$140,986$645,014
NSWPalm Beach2108Northern Beaches$762,500$121,528$640,972
NSWByron Bay2481NSW Country$655,000$68,910$586,090
NSWGordon2072Upper North Shore$600,000$133,157$466,843
NSWKillara2071Upper North Shore$612,500$145,880$466,620
NSWNaremburn2065Lower North$585,000$151,234$433,766
NSWAvalon Beach2107Northern Beaches$545,000$123,025$421,975
VICBlairgowrie3942Mornington Peninsula$469,500$61,502$407,998
NSWPymble2073Upper North Shore$576,500$177,888$398,612
NSWNorth Balgowlah2093Northern Beaches$565,000$179,557$385,443
NSWBilgola Plateau2107Northern Beaches$520,000$138,108$381,892
NSWMaroubra2035City and East$479,400$99,134$380,266
NSWCremorne2090Lower 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
StateSuburbPostcodeRegionAnnual change in unit priceEstimated annual household incomeHow much more your home increased compared to your income
NSWMilsons Point2061Lower North$508,500$178,867$329,633
NSWLittle Bay2036City and East$351,500$117,498$234,002
NSWFairlight2094Northern Beaches$299,000$150,831$148,169
QLDSunshine Beach4567Sunshine Coast$212,500$77,067$135,433
NSWDarling Point2027City and East$295,000$170,749$124,251
NSWRose Bay2029City and East$250,000$130,797$119,203
NSWDouble Bay2028City and East$260,000$142,656$117,344
NSWWoolloomooloo2011City and East$213,000$103,279$109,721
QLDCoolum Beach4573Sunshine Coast$181,000$72,984$108,016
NSWKingscliff2487NSW Country$176,000$70,810$105,190
NSWTerrigal2260Central Coast$200,000$96,658$103,342
NSWQueenscliff2096Northern Beaches$233,500$135,172$98,328
NSWYamba2464NSW Country$146,250$50,258$95,992
NSWNarrabeen2101Northern Beaches$181,500$91,074$90,426
VICBlackburn3130Outer East$194,300$104,380$89,920
VICGeelong3220Geelong$162,500$82,796$79,704
QLDNoosaville4566Sunshine Coast$132,000$66,255$65,745
QLDBuddina4575Sunshine Coast$145,000$79,540$65,460
QLDGolden Beach4551Sunshine Coast$108,000$58,145$49,855
QLDMooloolaba4557Sunshine Coast$118,000$68,555$49, 455

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