The Simple Reason So Many People Are Leaving Sydney
Sydney has long been considered one of the most beautiful cities on the planet.
From the iconic Sydney Harbour cityscape to rolling coastline beaches –- there’s little surprise as to why it was ranked the fifth most livable city in the world.
So some eyebrows may have been raised when statistics released from the September 2018 quarter showed that NSW had (by far) the biggest exodus of residents of any state or territory in Australia, with more than 21,000 Sydneysiders moving interstate.
The short answer? House prices. Sydney's median house price has dropped by almost $120,000 since early 2018, according to the latest report from the Domain Group, its sharpest downturn in two decades.
The lowering of house prices presents two key issues.
- The worst of a good bunch
A drop in house prices is indiscriminate. Generally speaking, if Sydney’s median house price declines, so too does the median house price in other states and territories. Yes, while this drop can be (and is) more pronounced in places like Sydney and Melbourne, falls continue to be seen across the entire country. Naturally, with prices dropping across the board, people will look for the best option(s) for their needs, at the most affordable cost.
As an example, a four-bedroom home with a pool in Brisbane’s outer suburbs, costs around a third of a similar property in Sydney. When the cost effectiveness of moving interstate outweighs the perceived perks and benefits of living in Sydney, the exodus of people moving out of NSW seems totally justifiable.
- Supply and demand
When house prices do drop, home owners become naturally reluctant to sell, as they are concerned that they won’t get maximum value for their property. Fewer buying options means less chance of striking upon that one dream home that will all but force you to stay in Sydney, cut your losses, and not look interstate and overseas for a cheaper option.
So, where are Sydneysiders moving?
A large proportion of those packing up and leaving NSW moved north to Queensland.
According to the Australian Bureau of Statistics, nearly 11,500 people moved from NSW to QLD in the September 2018 quarter. Victoria ran second, with just over 7,000 making the move south, whilst Western Australia received the third most migrating NSW residents.
According to CoreLogic’s Home Value Index of March 2019, Sydney’s median dwelling is a full $150,000 more expensive than its nearest rival, Melbourne, and nearly $300,000 more expensive than Brisbane.
From a different perspective, if you were to save $400 a week into a separate account dedicated purely to a home deposit, it would take you two years and eight months longer to save a deposit in Sydney, than in Brisbane.
So if you're a Sydneysider, don't be surprised if someone you know shuts up shop and hops on a plane to another Aussie state or territory sometime soon.