How are the Sydney and Melbourne economies drawing buyers in?
When people look at buying a property, one of the first aspects that anyone researches is the way of life that a certain region will offer. For people looking in New South Wales and Victoria, that search will uncover some pretty promising results in terms of economic positivity, and that's a fantastic way to start.
Employment prospects are important for those who are after a solid economy, and financial stability in these two states can be linked very strongly to their capital cities – Sydney and Melbourne. Sydney has long been considered the business hub of Australia, so employment there is very sought after. Melbourne is the cultural capital of this great country, and provides a vibrant and fun lifestyle for anyone living around the CBD or St Kilda particularly.
Depending on your experience or qualifications and interests, one of these cities might be jumping out to you more than the other. However, both are performing very well in the current landscape, and the buying is competitive. To set yourself on the best path to buy property in either of these capitals, a Cohen Handler buyer's agent is going to give you the edge when it comes to securing your dream home.
What position are the economies in?
The latest CommSec State of the States Report shows that New South Wales lies atop the pyramid in Australia as the strongest economy, while Victoria is in close second and going from strength to strength.
A state that has, in recent years, shown significant positivity in the economy is Western Australia through the mining boom. That has since cooled off, and the west coast is transitioning toward more of a service economy, so WA lies in sixth on the CommSec list. The median dwelling values from these states is soundly paralleled by this information, as the CoreLogic RP Data monthly indices show.
The median value of a property in Sydney is $955,290, which is an increase of 8.93 per cent over the past 12 months. Melbourne is close behind the Harbour City at $784,400 – showing growth of 10.14 per cent. On the other hand, Perth lies at $604,800, which is a decrease of 2.07 per cent through 2015. Perth is only one of two capital cities that has fallen in dwelling value over the last 12 months, the other being Darwin, even though Northern Territory comes in fourth on the economy list.
The states behind WA are Tasmania and South Australia, in equal seventh, although Tasmania has shown improvements to move up the list, while WA has fallen from fifth.
What all of this shows is just how strong the economic positions of Sydney and Melbourne really are. While the rest of the country looks to be dropping and doing its best to stay in touch, these two cities are growing in many areas.
The Australian Bureau of Statistics (ABS) reports that the population of Victoria grew the most in 2015, by 102,300 in fact. That amounted to 1.7 per cent of its entire population of 5,966,700. New South Wales was close behind with an additional 102,200, or 1.4 per cent, to its 7,644,200 residents. CommSec suggests population growth is a strong indicator of how well the economy is doing, and if that's to be believed, these two cities are standing head and shoulders above the rest. In fact, Queensland comes in third for population growth with 55,200, and that's some way off either of the previous two.
Are Sydney and Melbourne going to maintain this growth?
What many buyers consider before beginning their property search is how a region will fare in the long term.
Chief Economist at CommSec Craig James believes both Sydney and Melbourne are showing great strength, and that won't be coming to an end any time soon.
"NSW continues to lead other states and territories in economic performance, but Victoria has gained substantial ground with strong housing finance and the fastest annual economic growth rate in the country," he stated.
"NSW has a solid grip on the top ranking of economic performance. Unemployment has improved while population growth is above long-term averages, providing solid momentum to the state's economy."
Mr James was also very positive about Victoria's growth, indicating that it might not be too far away from taking top spot from New South Wales.
"Victoria also still has a strong grip on the second ranking overall and has been able to narrow the gap with NSW in the past quarter. Victoria has solid population growth which is why housing finance is the strongest in the nation."
To back that up, McCrindle Research have found that on current trajectories, Melbourne will overtake Sydney as the biggest city in the country by 2056 with a population in excess of 9 million. If you want to own a home in Australia's largest city before it booms, you can. Just talk to a buyer's agent from Cohen Handler to start the research process with your best foot forward!