Does Your Property Make More Than You?

Sydney property prices have been rising over the past year.

So has the money your home has been making over the past year - or longer - been more than what you earn from your job?

We explore whether homes in Sydney’s inner city and inner west make more than their owners.

Sydney’s history of rising prices

It’s often said there are generally two ways to make money - to work hard for it, or to own an asset that works hard for you. And Sydney property is a great example of the latter.

In the period between 1993 and 2018, the median Sydney property rose by an annual average of 7.8% a year, according to a report compiled by Aussie Home Loans. Since then it has risen by as much as 33.1% in a year (2021) but has also lost as much as -10.9% in a year (2022).

Last financial year, the median Sydney property value was back to growing again. CoreLogic data shows it rose 6.3% over FY2024, going from $1,073,924 on 30 June 2023 to $1,170,752 on 30 June 2024 - a difference of $96,828.

The median house price performed even better still, rising by an average of $142,079 (6.8%) to $1,466,475. That’s significantly more than average full-time earnings in New South Wales, which stand at $1,891.40 a week, or $98,352.80 a year.

So, if you earned an average salary last year, you didn’t earn anywhere near as much as Sydney’s average house price rise.

However, the median apartment value didn’t do quite as well, rising $47,061 to $808,407. That’s roughly half average full time-earnings but still the equivalent of a part-time job, depending on which sector you work in.

Inner West records even stronger house price growth

While these figures capture Sydney as a whole, drilling down into the inner city and inner west, we can see that some suburbs and property types outperformed even these impressive numbers.

Domain data reveals that, over 2023, the median house price in Sydney’s inner west went from $2,095,000 to $2,385,000 - a rise of $290,000 or 13.8%.

That means you’d need to be in the top 2% of income earners to have made more from your salary than an inner west house did over 2023.

Here are some of the top performers in both the housing and apartment markets for the year to 30 June 2024, according to realestate.com.au

Suburbs where owners made the most on their houses last financial year

Suburbs where owners made the most on their apartments last financial year

* Source: realestate.com.au suburb profiles

How do these compare with your income?

Zetland’s $575,000 and Chippendale’s $480,000 growth are real standouts even in a strongly performing market.

That said, the strength of our local house market can be seen in the fact that most suburbs recorded growth of over $200,000 in the last 12 months. Many suburbs also recorded very solid growth in apartment values. However, the data does reinforce our previous observation that the gap between house prices and apartment prices is growing.

So what kind of job would you need to earn more than a Zetland house in 2024?

According to the ATO, the only profession in the entire country with an average salary higher than $575,000 is neurosurgery, where the average salary is roughly $605,000.

The next highest paid professionals are anaesthetists who earn an average of $426,894 - less than the growth experienced in Chippendale’s housing market.

Then, the numbers drop quickly, with only two further groups of employees (financial dealers - $341,789 - and internal medicine specialists - $334,267) earning more than the $317,500 Alexandria houses made last year.

In fact, only psychiatrists ($270,412) and other medical practitioners ($251,722) could compete with our house list. Mining Engineers ($196,178), Legal professionals ($192,388), and CEOs and Managing Directors ($177,506) all fell short.

In other words, you would have to be among the very top earners in society to have beaten many parts of our local property market last financial year.

Want more?

If you’re interested in buying or selling in Sydney’s inner city and inner west, get in touch.