Sydney property prices hit all-time high on back of housing boom

It is now more expensive to buy a home in Sydney than in any other time in history.

Fresh data from property research firm CoreLogic shows Sydney's property values have eclipsed the stratospheric heights they reached in mid-2017.

The median value - meaning the middle price between the most expensive and the cheapest - for all dwellings in Sydney is now $895,933.

READ MORE: Huge number of Aussie homeowners considering sale

When excluding units, the new median high for detached homes is a belt-tightening $1,061,229.

Units are yet to hit record highs, with the median value for a flat in Sydney sitting at $738,254.

CoreLogic's executive research director Tim Lawless said he was not surprised by the new record.

READ MORE: 'Extreme offers' pricing first timers out of property market

"The recovery trend in Sydney following the -15.3 per cent decline from July 2017 to May 2019 was interrupted by COVID-19, with housing values falling by -3.0 per cent through the worst of the pandemic," Mr Lawless said.

"Since housing values found a floor in October last year, Sydney home values have risen 5.7 per cent to reach a new record high today.

"The fresh record high is great news for Sydney home owners, but highlights the challenges for non-home owners looking to participate in the housing market as values rise faster than incomes."

READ MORE: The 'perfect storm' driving up Aussie house prices

The surge in prices comes amid what some analysts are calling "the perfect storm" for house prices.

Interest rates are at an all-time historic low, responsible lending laws have been wound back and banks are offering some of the lowest fixed-rate mortgages in history.

Housing supply is restrained, and FOMO – or the fear of missing out – is prompting many first-time buyers into moving on their property dreams.

For many prospective buyers, the COVID-19 pandemic and its stay-at-home orders created the perfect environment for many to supercharge the saving rate for their deposits.

READ MORE: Aussie property prices rise at fastest rate in 17 years

With no international holidays, no fancy dinners out and a dramatic downturn in social events, many who retained their jobs by working from home were able to put away far more of their wage than ever before.

"It is the perfect storm for house prices. On the supply side, new listings through 2020 were well below the four preceding years and total listings now are also down as stock is absorbed before or as soon as properties hit the market," Canstar Group executive of financial services, Steve Mickenbecker, said.

"Property demand has run way ahead, with the fear of missing out becoming a powerful psychological driver as government incentives and low interest rates have encouraged first home buyers and home builders into the market in a rush."

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.