Sydney is Australia’s most ‘overvalued city’, according to a poll released today by PRDnationwide.
The survey of 1200 property investors around the country revealed 28% of respondents said Sydney house prices were most overvalued while 26% of respondents believed Brisbane homes were above a fair market price.
PRDnationwide research director Aaron Maskrey said Darwin followed closely with 13% of respondents choosing it as overvalued.
Only 3% of respondents thought Adelaide, Hobart and Canberra were overpriced compared to other capital cities.
“Basically what this research is saying is that the average buyer feels you get less bang for your buck in Brisbane and Sydney compared to other cities,” said Mr Maskrey.
“We’ve certainly seen house prices fall during the period of economic instability – but many investors believe prices still appear too high in some cities,” he said.
But that’s not about to change according to the research director.
“The number of people moving to Australia exceeds the number of dwellings becoming available — supply and demand suggests that this will continue to put pressure on house prices,” he said.
Mr Maskrey said that the survey shows that some cities are in the midst of a housing bubble in which prices bear no reflection of underlying economics.
“Prices in the Brisbane LGA have increased by 11.7% per annum in the past ten years. Wages on the other hand have increased by a lot less (4.5% per annum),” said Mr Maskrey.
“There will come a time, when people will won’t be prepared to pay these prices in their home town and look to invest in other states.”
The median price of a house in the Sydney statistical district is $487,500 and According to the Australian Bureau of Statistics, average weekly earnings for Australian employees are $49,592.
Therefore, the average house price in Sydney is almost 10 times earnings. Sydney house prices are therefore almost one and a half times those of the allegedly overpriced UK in relative terms. (According to UK National Statistics House Price Index December 2009).