It’s official Sydney's median house price has topped $1 million, but will that affect the housing market around Merimbula?
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Here is what $900,000 will buy you on the South Coast. Click here to see the graphic
According to Domain’s quarterly report, the median house price has increased by almost $200,000 in the past year or 22.9 per cent.
Domain’s senior economist Dr Andrew Wilson said median house prices leapt an extraordinary 8.4 per cent over the June quarter to $1,000,616.
"It's the highest rate of growth since the late 1980s," Dr Wilson said.
"And it's because of low interest rates and they're going lower, lower and lower."
When Sydney’s prices have surged in the past, it has prompted a move north or south as families trade out of Sydney and use the cash for a nicer house somewhere more affordable.
With low interest rates generally encouraging spending there is also the possibility that people living in areas of high property prices will look to invest in a house where prices are lower, such as Merimbula.
The News Weekly spoke to a number of local real estate agents to see whether they believe the Sydney housing bubble is having an affect on the local market.
Eve O’Brien from Eve O’Brien Properties
In terms of a housing bubble like what they have in Sydney we aren’t experiencing anything like that and I don’t think we will. The way bubble’s work is that it is based on supply and demand. When you have more demand than supply people will pay through the roof for what they want, especially when interest rates are low. Here, with our tiny population we have the opposite we have an oversupply of product. So although house prices have risen by about 5 per cent in the past few years until we have a bigger population we won’t see anything like the bubble that is in Sydney.
We are also a long way from Sydney so although I have seen a very slight increase in the number of Sydney people coming down here it isn’t enough to change our housing market. I think people in Sydney are starting to realise we have an airport here so they can get down here in only a couple hours but from my experience it seems that the end of the catchment area for Sydney holiday makers is further north near Ulladulla.
However, we have seen an extremely noticeable increase in the number of Canberrans buying houses down here.
Merimbula Lake - Graeme Fowler owner and agent
The Sydney housing market is not going to have a huge affect on the local market but our market has been reasonably strong over the last three to four months. I definitely haven’t notice a sudden stream of Sydney siders coming down here. We always get a steady drift from Melbourne but not so much Sydney. The house prices in Sydney are so high that with the average price of $900,000 you could buy 90 per cent of properties on the market in the Merimbula area. Generally speaking we have seen a slight rise in average prices but not a gross upturn. The lower, cheaper houses are gone, with more of the middle of the range houses available and a couple of the higher end houses, this means the average or median house price is slightly higher.
Nicole Cooper - director of Merimbula Elders
The housing bubble in Sydney will absolutely have an effect on the local housing market. What we find is that it takes time for that ripple to come down here. In the mean time we have noticed a shift and now the vast majority of buyers seem to be people from Canberra buying a property to retire into and then putting in a tenant until they are ready to retire. We are also seeing more young couples buying. A lot of them are actually buying land and then building.
We are definitely getting more Sydneysiders down here than we used to. The Merimbula markert used to be strongly driven by Melbourne. Now it seems to have had a bit of a switch with a lot more people from Canberra and a small increase in people from Sydney.
I don’t think we will see a bubble develop down here but I do think we will continue to see a steady increase in housing prices. They will continue to be reasonable but in the next six to 12 months we will see the prices rise.
Trent Pool principal licensee of Merimbula Realty
I do think we are seeing a bit of a flow on effect from the Sydney housing bubble. Mostly in older people who have been priced out of the Sydney market and are looking for an affordable place to retire.
The housing market down here is also changing due to rental habits. There has been a significant increase in rent prices recently so people who do rent here are now seeing the value in buying. So while the housing market here can be seen to rely retirees we are still seeing young couples realise they can buy with their mortgage repayments similar to what they pay renting.
I would say there has been a slight increase in the number of people from Sydney looking here but more so people from Melbourne.
Local real estate offers many options for under $1 million
The recently released Domain House Price Report, revealed the news that Sydney's median house price is now higher than the average cost of a home in London and is nearing New York.
The median house price in Sydney has smashed through the $1million dollar mark to reach $1,000,616. This is more than double the median house price in Merimbula which, in the 12 months until April 2015, was $447,000.
The difference in the median unit prices is even larger with Sydney’s median unit price of $686,078 triple that of Merimbula which is approximately $225,000.
Local real estate agents disagree as to whether the Sydney housing market is or will have an affect on our local market but they do all agree that with $1million a person would be able to buy 90 per cent of properties on the market in Merimbula and surrounding areas including stunning properties with ocean views.
Click through our gallery to see a number of different housing options while still spending less than $1million.