Australians priced out of housing, report says
- 5 March 2014
- From the section Business
A generation of Australians are being priced out of the housing market, leaving many facing a "lifetime of renting", according to a report by Credit Suisse.
Chinese buyers are currently pouring in more than A$5bn ($4.5bn; £2.7bn) into the residential market every year, pushing up prices, the findings show.
The median house price in Sydney has risen by 45% in the past five years.
Australia has some of the most expensive property markets globally.
The investment report by Credit Suisse analysts combines information from several official sources including the the Australian Foreign Investment Review Board, the Australian Department of Immigration and the Australian Bureau of Statistics.
However, the report's authors caution that the magnitude of flows into the Australian market from China is difficult to estimate precisely.
Median house price in Sydney and Melbourne have risen by more than a third, but Australian incomes are not keeping up, leaving the market open for a rising number of wealthy Chinese investors.
The cities of Sydney and Melbourne, which are among the most expensive in the world, are cited as the most popular destinations for Chinese buyers.
They are buying up 18% of new housing supplies in Sydney and 14% in Melbourne, and Credit Suisse expects them to continue to invest.
"We estimate the number will rise by 30% by 2020. This should support a further $44bn of Australian residential property purchases over the next seven years," said the report's Sydney-based authors.
But there is an upside for the Australian economy, with local businesses set to benefit from the surge of Chinese investment.
"As long as Australia remains open for business, our companies should also benefit from the next stage China's economic development," the report said.