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Queensland home value growth outpaces owner incomes

By Alanna Ngo

Wage growth has not kept up with the increase in property capital growth, which is why many Queensland home owners could be living in a house that earns three times more per year than their salary.

Research from Domain compared annual incomes to house price increases and found 11 suburbs and towns across the Sunshine State outstripped their owners’ when it came to annual return.

The value of homes in Paradise Point increased more than 24 per cent last year, which resulted in the average house price increase of $242,500, compared to the area’s average household income at $63,000.

Properties in the Brisbane’s inner west suburb of Fig Tree Pocket grew by 30 per cent in 2019, which meant their home values on average increased by $147,000, nearly $30,000 more than the average after-tax household wage.

The growth in the state over the last 12 months shows how much a property’s value can soar in a short amount of time, Domain senior research analyst Dr Nicole Powell said.

“We’re just talking about 12 months of property gross growth here and [in some suburbs] this is an income that’s higher than your wildest dreams,” Dr Powell said.

“It shows us just how important it is to make the right property decision — it can really change your overall family wealth dynamic.

“The real take-home here is how the right property purchase can change everything.

“I think when you’re particularly looking at places like the Gold Coast and the Sunshine Coast, that price growth is a lure for residents from other cities.”

The price growth was linked to an increase in buyer demand, and Fig Tree Pocket’s was sought after as a suburb that offers a relaxed lifestyle while close to schools, McGrath Paddington’s Alex Jordan told Domain.

“I would say demand here is bigger than the supply,” Mr Jordan said.

“And supply is tight because some of these properties have been transacting quickly, thanks to the strength of the market.”

Sourced: https://www.realestatebusiness.com.au
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