Property prices in Australia have increased rapidly since the financial crisis, with house prices in Melbourne and Sydney both up around 25 per cent in the last three years alone.
Now it seems that Australia is poised to see the same rapid growth in rental property prices that we saw in 2007-08.
While the housing market has continued to improve, a recent survey by real estate firm Zillow found that the median house price in Australia is now just shy of $600,000, a significant increase from the $480,000 median in 2007.
Zillows research found that median house prices were up 7.9 per cent on the previous year, but only 6.7 per cent from a year ago.
And the median rent price for a one-bedroom property in Sydney is now around $1,000 a week, up from $900 a week a year before.
There’s no doubt that there’s been a significant slowdown in the growth of rental property in recent years.
But how much is the real estate market really worth?
The answer is really difficult to say, but a new survey conducted by realtor agency Zillys suggests that it could be a lot.
The Zillowers Real Estate Report found that Australia’s rental housing market was worth $2.5 billion in 2017.
That’s up nearly 7 per cent since last year, with the median price in the country now almost $1 million.
But if you were to compare it to the value of the median household income in the US, the median property price in that country is just $1.2 million, while the median wage is around $23,000.
And while that’s certainly not the best of times, a $1-million house might not be the worst of times.
The median household disposable income in Australia was just $26,800 in 2017, according to the Australian Bureau of Statistics, which is just slightly below the $30,000 in 2017 for the US median household.
The same survey found that around one-third of households in Australia earned less than $15,000 last year.
While many are still struggling to get by, it seems like it may be time to get a little more creative.
Zellow’s research suggests that Australia could see a rise in rental house prices of between 25 and 50 per cent over the next three years.
However, if you’re looking for a place to live, you might be better off buying a property in the state of Victoria.
According to the latest Zillowed property report, Victoria has a median property value of $1 billion.
But the state is just two kilometres away from Melbourne and just over one hour from Sydney, so you can be confident that you’ll get the best deal for your dollar.
Property prices and rents in Victoria were up 5.7% in 2017 from a decade ago, while rents in Melbourne were up around 5.4 per cent.
It seems like Australia’s real estate bubble may have burst.
But are the rental property bubble bursting?
The Zellows survey found the median income in Victoria was just over $30-million last year and is still just $25,000 below that figure for the entire US.
The average rental income in Melbourne is just under $35,000 per year.
But while many Australians are living in poverty, the Zellowers report suggests that the current median household wage in Melbourne may not be enough to support a family of five.
This is because while the state’s median household rent price is $1 a week in 2017 it was $1 in 2017 and $2 in 2016.
And although the median salary in Melbourne has risen, the real median household salary is just below the national average of $31,000 (and is still below the average for the UK, where the median is $36,000).
In other words, while many Australian families are still living in absolute poverty, it may not necessarily be a bad thing if the rent prices in your neighbourhood actually rise.
How to use this infographic to make your property comparison?
The real estate property survey results can be a useful tool to compare different types of property in your region.
The data below can be used to show you where the average price of a home is for a given property type in a particular area.
You can also compare the average rent for a two-bedroom home in your area to the average median rent for one-bedrooms across Australia.
But be aware that the ZillOWs research is a snapshot of the current market.
The actual rental market will likely be much more volatile in the next few years.
That said, if Zillowns research proves to be correct, you’ll be able to make an informed decision about where you want to live.
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