PHOTO: House depsoits are becoming increasingly hard to save for. FILE
Australian home values rose almost 10 times faster than wages last year, with the market boom pushing the dream of homeownership further out of reach for more Australians.
House prices across the country surged 22.1 per cent last year, according to CoreLogic figures, while wages rose just 2.3 per cent, the latest Australian Bureau of Statistics figures show.
“That’s a massive gap,” said CoreLogic research director Tim Lawless. “[However] even though we haven’t seen such a large gap historically, it’s very common for housing values to rise substantially more than wages have, hence this ongoing worsening affordability.”
CoreLogic modelling shows dwelling values climbed at more than double the annual pace of wages over the past decade, up by an average of 5.5 per cent each year compared with a 2.3 per cent average rise in the wage price index.
While there had been periods where wage growth was the stronger of the two, it had been substantially outstripped by rising home values long term, Mr Lawless said. Dwelling values nationally have almost tripled over the past two decades, up about 194 per cent as of December 2021, while wages climbed about 81 per cent.
Every state and territory recorded a substantially larger lift in property values, both last year and long term. Tasmania had the largest gap in 2021 with dwelling values surging 28.7 per cent – the strongest growth in the country – while wages lifted 3 per cent.
NSW and Tasmania had the largest difference over the decade, with dwelling values increasing more than four and three times faster than wages respectively. They were followed by Victoria and the ACT where values climbed more than two-and-a-half times faster.
Mr Lawless said those already in the property market had seen the benefit of equity accrual, but the substantial difference between property and wage growth had made raising a deposit and funding transaction costs a more formidable challenge for first-home buyers.
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