Recent announcements have positive implications for the ongoing health of the Sydney housing market.

Reserve Bank Assistant Governor Guy Debelle revealed last week that Australian housing markets were unlikely to record the steep price falls experienced by some markets in Europe and the US.

The underlying resilience of Australian housing markets has of course been apparent for some time and was never really in question given the long-term attachment of Australians to home ownership.

Home ownership rates in Australia have declined only marginally over the past 5 years despite the impact of two significant downturns in buyer activity levels during that period.

According to the 2011 Census, 67 percent of Australian households either own their own home or are in the process of owning their own home with a mortgage. This compares to the 68 percent recorded in 2006. Australia’s home ownership rates have been relatively consistent for over 50 years.

Sydney recorded the best performance in home ownership growth of all the capitals rising from 62.2 percent in 2006 to 65.2 percent in 2011. This is despite Sydney having clearly the nation’s highest capital city median house prices.

Sydney’s home ownership rate would have increased since the census data was collected in August of 2011. This increase is a result of a surge in first home buyers recorded over the later part of 2011 and into 2012 driven by state government changes to buyer stamp duty concessions and grants.

The state government indicated that it also proposes to implement changes to the planning system designed to streamline the development approval process. With current residential construction levels struggling to cater for Sydney’s rising housing demand it can be hoped that this initiative will enhance Sydney’s recent surge in home ownership.

Source:  Dr Andrew Wilson is Senior Economist for Australian Property Monitors

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