PHOTO: Millennials are fleeing suburbs where house price are rising fastest and moving to parts of Australia where real estate is cheaper. FILE
Millennials Flock to Cheaper Housing Areas as House Prices Surge
Sydney’s Eastern Suburbs and Parramatta Witness Millennial Exodus
The e61 Institute, an economic research group, has identified a trend where Millennials are leaving suburbs with rapidly rising house prices in favor of more affordable real estate in various parts of Australia. Sydney, in particular, has seen an exodus of young people, especially from the eastern suburbs and Parramatta, due to housing affordability issues.
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Age and Family Planning Play a Role in Migration
Millennials, born between 1981 and 1996, are more likely to relocate during the years when they start families and require larger housing options. According to the report, people in their thirties are leaving at the fastest rate, indicating that unaffordable housing is driving significant labor relocation across the country.
Housing Prices Soar Beyond Reach
Sydney’s median house price stands at $1.334 million, making it challenging for an average full-time worker on a $94,000 yearly income to secure a $1 million loan. Areas like Bondi and Vaucluse in the eastern suburbs have prices ranging from $4 million to $8 million, putting homeownership out of reach for many, including dual-income households earning over $200,000 annually.
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Popular Destinations for Relocation
People leaving Sydney are opting for less-expensive coastal regions like Wollongong and Newcastle or heading to south-east Queensland, Canberra, and other parts of regional New South Wales. The report highlights that Canberra is particularly popular among those seeking to relocate.
The Impact of Housing Price Growth
The e61 Institute’s calculations show that for every one percentage point increase in housing prices over a five-year period up to 2016, an additional 0.2 percent of the population moved away in the following five years. The soaring house prices in Sydney have driven many to seek more affordable alternatives elsewhere.
Outlook for Sydney’s Population
Despite receiving a significant share of overseas immigration, Sydney has seen an annual net population loss of 0.5 percent over the past two decades as more residents leave for other parts of Australia. This trend is likely to continue, with the report indicating that inward foreign migration is the only factor offsetting the city’s population decline.
House Prices Remain Resilient Amid Rate Increases
Despite the Reserve Bank’s 12 rate hikes since May 2022, Sydney’s median house price has risen by 1 percent in the last month, reaching $1,333,985. The real estate market’s resilience remains noteworthy even with rising interest rates.
Median House Prices in Major Australian Cities – July 2023
- SYDNEY: Up 1% to $1,333,985
- MELBOURNE: Up 0.3% to $923,881
- BRISBANE: Up 1.4% to $819,832
- ADELAIDE: Up 1.4% to $722,793
- PERTH: Up 1% to $625,969
- HOBART: Down 0.1% to $696,570
- DARWIN: Up 0.5% to $583,913
- CANBERRA: Down 0.3% to $958,950
Source: CoreLogic data on median house prices for July 2023