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New research from the Real Estate Institute of Australia (REIA) found housing prices have grown at double the pace of rents across the last 20 years.
The institute’s latest Real Estate Market Facts: 20 Years report revealed the weighted average median house price for the eight capital cities increased 103.8 per cent from 2002 to 2022, as opposed to a 41.4 per cent increase in rents during the same period.
Median house price increases ranged from 75.4 per cent in Perth to an enormous 269.1 per cent in Hobart.
REIA president Hayden Groves explained that “over the past 10 years, the weighted average median house price for the eight capital cities grew by 56.1 per cent”.
He continued: “The highest increase was in Sydney (91.7 per cent), and the lowest increase was 33.6 per cent for Adelaide. Both Perth and Darwin had decreases over the past decade, down 10.2 per cent and 18.1 per cent, respectively.”
The report noted that price growth for Australia’s other dwellings, which have risen 51 per cent over the past two decades, also outstripped the rate of growth experienced by rents.
During that same period, median rents for three-bedroom homes across Australia’s capitals rose 41.4 per cent to $506 per week, with these increases ranging from 30.6 per cent in Melbourne to 84 per cent in Hobart.
“Since 2002, the weighted average median rent for two-bedroom other dwellings grew by 39.3 per cent to $474 per week. The median rent increased in all capital cities ranging from 26.1 per cent in Sydney to 90.9 per cent,” Mr Groves said.
Additionally, the report found that the last 20 years had seen the completion of 3,390,189 new dwellings across the country, with 63.7 per cent being new houses and 36.3 per cent other residential projects.
A closer look at the data showed 19,836 new home completions in March 2012 was the lowest rate for any month across the period. Conversely, September 2018 recorded the highest number of finished houses at 33,853.
For alternative residential dwellings, March 2002 claims the lowest production month (7,294), while December 2016 boasts the highest count of new completions — 30,328.
Mr Groves explained as house prices grew, so too did the amount of annual income required to purchase a home. In June 2022, the average median house price was six years of annual family income, rising to six and a half years in June 2012 before surging to eight years and nine months 10 years later.
He concluded: “Commonwealth Rent Assistance is not keeping pace with rent increases. For a family with two children, in 2002, rent assistance met 24.4 per cent of the median rent for a three-bedroom house, whereas in 2022, this had reduced to 16.9 per cent.”
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