Melbourne And Sydney Head To Head - Property Market Battle
If you’re unaware of the ongoing rivalry between Australia’s two major cities, Sydney and Melbourne, you’re probably not from around here.
While Melbourne boasts a significant culture and food scene, Sydney competes with its world-famous landmarks, beaches and sunshine.
In delving further into the rivalry, it becomes apparent the parallels between the two in terms of economy. It is evident that living is becoming more difficult as costs increase and wages do not.
Marion Mays, CEO of property investment mentoring firm Thalia Stanley Group, says she visits Sydney frequently, and is among many who notice a large shift in lifestyle, despite being just an hour’s flight from Melbourne.
“Sydney is crowded, fast-paced and business-centric; and the people reflect this. There is something about a city that never stops moving. It is certainly never boring but it also creates an atmosphere of increased stress and little time for niceties,” Ms Mays says.
So, why has Sydney become so high-pressure in comparison to its Melbourne counterpart? Is it because the people there thrive off a busy corporate environment? Or because are they simply overworked?
After all, it is not easy to balance the cost of living in a place that has just hit top ten on the list of world’s most expensive cities.
According to Budget Direct’s ‘Cost of Living Comparison’, the average wages in Sydney and Melbourne remain relatively on par, with Sydney at $5,043.59 per month and Melbourne at $4,227.05. Yet upon comparing living costs, the gap is significantly larger.
To buy a city apartment in Sydney, for example, costs an average of $13,000 per square meter, as opposed to $8,712 per square metre in Melbourne. Meanwhile, those in Sydney will also be hit with higher transport and grocery costs.
In comparison, Melbourne has recently taken the lead on property values and investor appeal. According to the CoreLogic Property Market Indicator Summary (March 2018), the city saw a 5.4 percent increase in capital city home values over the last 12 months. Meanwhile, Sydney dropped by 2.1 per cent.
“More and more of my clients reflect these results, as even the Sydneyites gravitate towards investing in the Melbourne market over Sydney,” Ms Mays says.
""Yet many of my Melbournian clients struggle to set aside any money following day-to-day living expenses. Placed in the same situation in a more expensive setting, I can only imagine the increased pressure they would feel,"" she adds.
RateCity tells us that buyers can expect to pay an average of $880,902 for a median house in Melbourne compared to $1,167,516 in Sydney. This puts the required average household incomes for homebuyers in Sydney at almost $200,000, as opposed to Melbourne’s $140,000.
It should not be anyone’s narrative that they have to work so hard to maintain a decent standard of living resulting in little time for leisure. Yet, Ms Mays says this is what she sees frequently in Sydney – which is not a great reflection of the local economy.
It also begs the question: is Sydney’s economy merely ahead of its time and waiting for the rest of Australia to catch up?
“This is why I urge all first-homebuyers and investors to get into the market sooner rather than later. With housing affordability growing further out of reach, the state of the Melbourne market may follow suit much quicker than expected,” Ms says.
There is a reason Melbourne has beat Sydney out for the world’s most liveable city seven years running, and it is certainly not because of the abundance of culture or laneway art.
How lucky Melbournians are to live in a city where the housing market, whilst with plenty of hard work, remains penetrable - A city where net incomes certainly seem more on par with living costs than that of Sydney’s.