Adelaide, Perth overtake Melbourne home values?

Adelaide, Perth overtake Melbourne home values?

Are property prices just too high in Australia? I have been to Perth, Melbourne and Sydney. Melbourne is more vibrant than Perth. So, Perth property prices has always been lower than Melbourne. That’s what I learnt when I searched and that’s what everyone has been saying too. Latest report however said that the home prices of both Adelaide and Perth is higher than Melbourne!? As per the stats, it’s true. It meant that if you like to buy a property in Australia, Melbourne is now a cheaper choice than Perth.

Article in afr.com: “Adelaide’s home values surpassed Melbourne’s for the first time on record in August after climbing by 1.4 per cent over the month to $790,789, making it the fourth most expensive market in the country behind Sydney, Brisbane and Canberra, data from CoreLogic shows.

Perth’s median dwelling value also pulled ahead of Melbourne for the first time since 2015 after clocking up another 2 per cent gain to $785,250, which is now fifth-highest of all the capital cities.”

Refer here for more details: Article in afr.com

Can Australians working in Perth afford to buy Perth properties?

“The average annual salary in Perth is AUD79,000, according to PayScale data sourced from nearly 20,000 individual reports.” Source: Forbes.com. This is AUD6,583 per month.

In other words, if this average person is to buy a property in Perth (refer to the below), the total monthly repayment is AUD4,352 or very close to 70 percent of the income spent on property repayment alone. This is why it’s getting much harder to buy a property unless one is earning higher than the average pay in Perth. If the price move further upwards, then the issue becomes bigger too.

Learning from demand, supply and prices

Many reports said that the demand exceeded supply which is why prices move upwards. However, when we speak about demand, we need to pinpoint it down further to the demand for certain areas versus the demand. If we use a macro view, then we will not gain much insights. Prices will rise because demand for certain areas far exceed average numbers. When two or more people wanted to buy the limited supply of property, their best weapon is to offer a higher price…

Happy knowing. I wonder when I will go Perth again. Can the flight ticket be cheaper?

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