Newcastle housing is among the least affordable in the world. Newcastle housing affordability has worsened by 30 per cent in 10 years, and experts say the city’s property marketis now “exceedingly” expensive by world standards.
The median price of a house or unit in Newcastle and Lake Macquarie has grown from 6.3 years to 8.3 years of gross household income since 2008, according to a CoreLogic analysis.
The city’s price-to-income ratio of 8.3 is above the national ratio (6.8) andMelbourne’s (8.1) but lower than Sydney’s (9.1).
Dr Bob Birrell, the president of then Population Research Institute, described a price-to-income ratio of 8.3 as “exceedingly high” by global standards.
“It’s reflecting the underlyingdemand for especially family-friendly housing in the major metropolises and the areas nearby,” he said.
“There’s a flow-on going to areas in Sydney’s ambit.Latest figures show Sydney losing 18,000 [in outward migration] in one year.”
The price-to-income ratio is regarded by the United Nations and World Bank as the most reliable indicator of housing affordability.
House prices have started falling in , but OECD data for the June quarter still rankeditsproperty as the seventh most expensive among developed countries when measured against incomes.
A ratio of 8.3 would place Newcastle in the top 10 per cent of cities in the world, according tothe Demographia website.Demographia labels cities with ratios above 5.1 “severely unaffordable”.
The CoreLogic report by analyst Jade Harling said rapid price growth in many n cities had been accompanied by mild growth in household incomes.
Greg Budworth, the group managing director of Compass Housing Services, said affordability was a major issue in the Hunter and other regional centres.
“Relatively high prices for homes and rents in regional cities, where people often earn lower incomes than in capital cities, means housing unaffordability is not just confined to Sydney and Melbourne,” he said.
High prices pushed“key” city workers on moderate salaries to fringe suburbs, addingto their travel costs and commutingtime.
“We need a national plan for housing that focuses on all parts of the country and for all aspects of the housing continuum, from homelessness to home buyers.”
The CoreLogic report also included data about turnover rates –the percentage of houses which changed hands in a given period –in cities across the country.
The turnover rates in Newcastle (6.2 per cent to 5.0 per cent), Lake Macquarie (5.9 to 5.3), Cessnock (6.8 to 6.5), Port Stephens (6.9 to 5.9) and Maitland (7.1 to 6.7) have fallen in the past year as the property market has cooled.
The Newcastle Herald reported this month that property prices in Newcastle had dipped 1.9 per cent in the September quarter, the first drop over an extended period since 2011.
Newcastlehouse values hadjumped about 50 per cent in five years until the downturn.
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