Why is Sydney's housing market so expensive? Sometimes when people try to answer this question, they point out that more expensive property prices are offset by higher wages in Sydney; and this argument is, at least to some extent, true. Sydney wages are higher, but not to the same extent as property prices compared with other cities. Based on data released by the Australian Bureau of Statistics last week, the gap between Sydney and Melbourne wages is only around $5,000 (9.2%) per annum, Brisbane is fairly similar, with wages being $5,100 (9.4%) lower per annum. Perth wages are roughly on par with Sydney’s, showing a $490 (0.9%) difference. The largest gap between Sydney wages and the other capital cities is apparent in Hobart, where the difference is a more significant $10,500 (19.3%) per annum.
The data released by the ABS is unfortunately quite lagging, being current to June 2010. To compare apples with apples, we have provided median dwelling prices from June 2010 to highlight what might be described as some inequity of dwelling prices when we compare Sydney incomes with dwelling prices.Click to enlarge