We all agree to this that Sydney has proven the most expensive city for homebuyers in Australia. To our utmost surprise there’s a price difference between Sydney and Melbourne hitting an unprecedented level.

According to the PropTracks data, by August, Sydney’s median house price is 70% higher than Melbourne, but with Melbourne homes now are 41% cheaper, and when we say low by 41% it means $600,000 difference, holding the largest price gap in 20 years.

Growth drivers of Sydney

One of the factors which is driving the growth in Sydney’s housing market is its compelling land supply. Natural features including its harbor and national parks in Sydney limits the land availability. On the contrary, Melbourne has seen a higher rate of new home completion per capita.

Over the decade, Victoria averaged 9.5 new dwellings per 1000 residents per year, if compared to just Seven in New South Wales.

Higher Building Costs in Sydney

According to economists Sydney has a higher construction costs. Additional charges like, Red Tape, taxes, and other fees make new homes 50% costly as compared to Melbourne.

Experts think that Waterfront properties, and International appeal is keeping the Sydney’s market strong.

Melbourne Struggles Post Pandemic

There are many factors that contribute to the continuous struggle in Melbourne property market since Pandemic, losing population and experiencing less price boost than the other Australian cities. 

Melbourne has proven to be the weakest performing capital with house prices still 4.7% below their peak since March 2020.Melbourne has even dropped to the 4th position to Australia’s most expensive capital, Brisbane and Canberra surpassing it.

Victoria Losses Investors Interest

As we keep going with many other factors that are contributing to Melbourne’s underperformance.

Yet another reason which has been added to the list is the higher land taxes for investment properties, with having the high stock level has tended to lose the investors interest. In July Melbourne listing was highest since November 2018, offering inventors or buyers with many options.

The future of the two cities have divided

Now that we have discussed a lot, Melbourne’s housing market is expected to remain below as compared to Sydney.

High inventory with soft economic conditions will be the continuous reason for Melbourne prices to fall. But not to miss the point that, as Melbourne houses become more affordable, the price gap between the two cities will eventually be reduced.

On the other hand Sydney’s geographic limitations and global appeal will ensure it retains the premium price. This may make Melbourne more appealing in the future.

Melbourne Vs. Sydney it’s not only about the cities, it’s about the right investment decision

Since we have discussed a lot about the exponential growth in the Sydney property market and dip in the Melbourne property market, this points towards the right investment strategies. 

If you are a First Home Buyer or a full time investor or a seasonal investor, all you need to have is an expert by your side, who can guide you with the right investment strategies. When and where to invest in a million dollar question because this requires expertise. 

This is where ASK Financials vouch for you. Our team of experts will bring the best investment strategies on the table which help you to add a few zeros to your portfolio.

To learn more, book a discovery call and experience the difference. 

 

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