NEWS

This Chart Shows Just How Ridiculous Sydney House Prices Are

Housing prices up 70 percent. Wages up 13 percent. This is fine.

21/03/2017 11:42 AM AEDT | Updated 21/03/2017 12:48 PM AEDT

CANBERRA -- Housing affordability is an enormous issue around the country. You know it. We know it. Social services agencies know it. Even the government knows it, with a big housing affordability package promised for the May budget.

Now, one graph has summed up just exactly how out-of-control this affordability issue is, with house prices rising five times faster than wages.

The Australian Bureau of Statistics released its regular property price index on Tuesday morning, confirming prices rose 4.1 percent in the December 2016 quarter. That's a 4 percent increase in just three months nationwide, with prices in Sydney (up 6.1 percent) and Melbourne (6 percent) even higher. This is the biggest quarterly jump in prices since June 2015, and leading to a 10.8 percent jump in house prices across 2016 in Melbourne and 10.3 percent spike in Sydney.

We're betting you didn't get a 10 percent pay rise this year.

The average house price in Australia is now $656,800. In NSW, that average price jumps to $865,000, by far the highest price in the country; Victoria is next at $690,000, then the ACT at $642,000 and Western Australia at $536,000. If you're after a cheaper option, head south, because Tasmania's average price is $343,900.

But while these numbers might already seem mind-boggling to the average worker, or young person, or older person, or anyone without a few commas in their bank account, it gets worse. Ben Phillips, an associate professor of economics and public policy at the Australian National University, pulled together some previous ABS data to paint this troubling picture; that Sydney house prices have jumped 70 percent in the last five years, while average income growth has increased just 13 percent.

"House prices in Australia are again increasing rapidly in Sydney and Melbourne in spite of record low wages growth and a relatively weak employment market," Phillips told The Huffington Post Australia.

"This result comes at the same time that Australia is in a home construction super cycle, building more homes than ever before. The house price growth is largely related to investor activity in Sydney and Melbourne. Low interest rates and tax incentives such as negative gearing and capital gains tax discounts are likely adding extra fuel to price growth."

In other words, Phillips' analysis shows that while the average wage grew by 13 percent in the last half-decade, the average Sydney home went up by 70 percent. Sydney home prices ballooned more than five times faster than the average wage in that time.

ABS data shows that 'Full-time adult average weekly ordinary time earnings' increased by 2.2 percent between November 2015 and November 2016. Between December 2015 and December 2016, property prices grew by 7.7 percent nationwide -- more than three times higher than the wage growth.

Nice.

ALSO ON HUFFPOST AUSTRALIA

More On This Topic