IT may have the highest prices but Sydney has actually been the country’s weakest performing property market for much of the 21st century.
An analysis of price movements since 2002 showed Sydney property values grew at a slower rate than those in every other capital.
Sydney growth for the 15 years from September 2002 to September 2017 was also below the average for the eight capitals combined.
Harbour City prices grew by 142 per cent over the period, while the average for all capitals was 161 per cent.
Roughly half of the Sydney growth in that time occurred over the last five years when the city was going through an unprecedented boom.
The analysis of the Australian Bureau of Statistics’ Established House Price Index further revealed the strongest market was in Tasmania.
Hobart growth was nearly double Sydney’s at 220 per cent and narrowly above Melbourne growth of 208 per cent.
PRICE GROWTH 2002-2017
The difference was that the Hobart growth came off a considerably smaller base, with small Sydney gains often eclipsing larger Hobart increases in dollar terms.
The 26 per cent jump in Hobart prices recorded over 2002-2003, for example, represented an increase of $35,350, while Sydney’s 17 per cent gain was equivalent to $66,750.
The Hobart median price was 137,150 and the Sydney median was $387,500 in 2002.
Peter Koulizos, chairman of Property Investment Professionals of Australia, which did the analysis, said slower Sydney growth over the 15-year period was due to a long slump during the 2000s.
“An issue (we) had during Sydney’s recent growth run was we knew its market had done very little for the best part of 10 years beforehand,” Mr Koulizos said.
“So it was the sign of a normal market cycle, not a bubble that threatened real estate prices across the country.”
The strong growth in Hobart prices suggested that affordability was a major incentive for buyers, he added. “Hobart’s position at number one in the results is further evidence that affordable property is on the radar of investors who generally opt for lower priced real estate,” Mr Koulizos said.
CAPITAL CITIES (By median house price)
Aidan Devine, realestate.com.au, 20 February 2018