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Australia's impending property boom: How the average cost of a home will surge to $6.3MILLION in just 25 years - and it's not Sydney that will be hit the hardest

Daily Mail logo Daily Mail 13/06/2018 Charlie Moore

a small town: Average homes in Australia may cost up to $6.3million in just 25 years, a bombshell study has revealed. Pictured: Suburban homes in Brisbane where the average price may reach $2.3m © Provided by Associated Newspapers Limited Average homes in Australia may cost up to $6.3million in just 25 years, a bombshell study has revealed. Pictured: Suburban homes in Brisbane where the average price may reach $2.3m Average homes in Australia may cost up to $6.3million in just 25 years, a bombshell study has revealed. 

Projections show median house prices will reach that figure in Sydney by 2043 - up from $1.03million today.  

The Aussie Home Loans and CoreLogic survey predicts average prices will hit $5.8million in Melbourne, $2.9million in Canberra, $2.5million in Perth and $2.3million in Brisbane - with the biggest increase in Melbourne.

Wages will also increase over this time - but with Australia enduring one of the lowest rates of wage growth in the world, the prospect of houses becoming less affordable is very real. 

a screenshot of a cell phone © Provided by Associated Newspapers Limited

The surveyors made their predictions by analysing house price changes over the past 25 years and extrapolating.

Based on national house values rising at the annual rate of 6.8 per cent per annum since 1993, the national median house value would be approaching the $3million mark in 2043.

The median unit value would be just over $2.1 million. 

a large city with many buildings: Projections show median house prices will reach that figure in Sydney by 2043 - up from $1.03million today © Provided by Associated Newspapers Limited Projections show median house prices will reach that figure in Sydney by 2043 - up from $1.03million today Chief Executive Officer of Aussie, Mr James Symond, said: 'Housing continues to grow as Australia's largest asset class. If the changing face of residential property and staggering growth of technology we've seen over the last 25 years continues, it's likely the next 25 years will produce even greater change.' 

He added: 'I expect the growth trend will continue especially with high immigration levels.' 

a screenshot of a cell phone © Provided by Associated Newspapers Limited

Byron's Suffolk Park topped the nation for value growth, with the median house price moving from just $74,250 25 years ago to $1,185,000 in 2018, an increase of 11.7 per cent per annum. 

Coastal and lifestyle markets around the Hunter and Illawarra regions were also standouts, comprising four suburbs in the national Top 10.

Melbourne has had the largest annual percentage increase in both house and unit values within a capital city over the past 25 years. 

House values have risen at the annual rate of 8.1 per cent or $28,300 since 1993.

At the same rate of growth over the next 25 years, Melbourne’s median house value could rise from $825,000 to $5,825,000 in 2043.

Mr Symond suggested this meant a housing crisis in the city could be one of the most acute in the country. 

He said: 'Housing affordability remains a major issue for people in Melbourne, largely driven by the recent and dramatic housing price growth across the city. 

a screenshot of a cell phone: The report revealed the top 20 suburbs in Melbourne for value growth over the last 25 years, with the Mornington Peninsula's Flinders the star performer © Provided by Associated Newspapers Limited The report revealed the top 20 suburbs in Melbourne for value growth over the last 25 years, with the Mornington Peninsula's Flinders the star performer a screenshot of a cell phone © Provided by Associated Newspapers Limited

'Buyers now need to dedicate 160 per cent of their annual gross household income to raise a 20 per cent deposit, with property worth a staggering eight times annual household incomes.'  

Simple extrapolations don't take into account how economic and demographic conditions might play out over the next 25 years or how housing demand and supply may evolve.

But this report may add weight to the growing feeling - especially among Australia's young - that more houses need to be built to ease such dramatic price increases.

The Korn Ferry 2018 Salary Forecast predicted Australia would have the lowest real wage growth of 97 countries surveyed with an increase of just 0.7 per cent.

a close up of a building: Melbourne has had the largest annual percentage increase in both house and unit values within a capital city over the past 25 years © Provided by Associated Newspapers Limited Melbourne has had the largest annual percentage increase in both house and unit values within a capital city over the past 25 years
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