It’s one of Australia’s most enduring public debates – Melbourne or Sydney?
The sunny harbor city of Sydney with its emerald water, white sandy beaches and iconic Opera House – or rainy, atmospheric Melbourne with its theatres, cafes, restaurants and bohemian style?
Whatever your personal tastes, one of the best ways to gauge which of these leading Australian cities is ahead is by checking out the performance of the local real estate market.
For many years, Sydney has been Australia’s real estate hot spot. But right now, Melbourne appears to have the edge over Sydney…
Melbourne’s superior price growth
The January 2016 CoreLogic RP Data Hedonic Home Value Index has just been released and it shows Melbourne squeezing out Sydney for real estate price growth.
According to the Index, over the past twelve months Melbourne’s median dwelling prices has risen 11% to $595,000. Compare that to the Index measure of Sydney’s median dwelling value – a far higher $776,000 but with a 10.5% growth rate.
So in terms of price growth, Melbourne is the real estate winner, pipping Sydney at the price growth post by 0.5%!
Sydney stalls, Melbourne holds fast
CoreLogic’s overall picture for Australia’s property sector is that the real estate market is bouncing back, led principally by the rising growth rates being recorded in Melbourne and Sydney.
But Tim Lawless, Head of Research at CoreLogic, says the usual roles are being reversed.
“Previously, during the height of the growth phase, there was a large separation between Sydney’s housing market, which was streaking ahead, and Melbourne’s, where the rate of capital gain was substantial but still well below the heights being recorded in Sydney,” he says.
“The latest data reveals Sydney’s housing market is now playing second fiddle to Melbourne’s, at least in annual growth terms.”
Melbourne or Sydney? Picking a city for property investment
So in terms of price growth, Melbourne has the bragging rights at the moment for its real estate market. That could indicate that it’s the better city to buy in – but that’s really only one factor in the spectrum of issues that should be considered.
Location aside, if you’re considering buying or investing in property in either Sydney or Melbourne it’s important to concentrate on the true value of the sites you’re looking at.
Is the property in good condition? Is the price fair for the area that it’s in? What are the re-sale prospects further down the line? Whichever the differences of the cities you look at, the fundamentals of real estate investment remain the same.
A great way to tell is to have a pre-sale inspection report done that checks the building all over and reports on issues like pests and damage.
Building and pest inspections in Sydney or Melbourne properties can give you valuable insights into the condition and value of the real estate you’re looking at, and can de done on individual homes or strata properties.
The debate between Melbourne and Sydney will probably never be solved.
But they are Australia’s biggest real estate markets with lots of opportunities for growth and investment. Whichever one you choose, make sure the property you pick up is what you want – then go and enjoy the city you’ve chosen!
By Darel McBride
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