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Is there a housing bubble in Sydney 2017?
Yes, most people think so. It is almost impossible for most first home buyers to afford a house in greater Sydney. Because of “negative gearing” tax breaks, investors with high incomes are able to pay high prices for properties and outbid everyone.
As a travel writer, I have visited Sydney many times and have seen firsthand the impact of the housing bubble on the city. In this article, I will explore the current state of the housing market in Sydney and whether or not there is a housing bubble.
Sydney’s Housing Market
Sydney’s housing market has been booming for the past few years, with property prices increasing at a rapid rate. According to the Domain House Price Report, the median house price in Sydney is $1,211,488, while the median unit price is $743,012. These prices are out of reach for most first home buyers, who are struggling to enter the housing market.
Negative Gearing
One of the main reasons why the housing market in Sydney is so expensive is because of negative gearing. Negative gearing is a tax break that allows property investors to offset the losses they make on investment properties against their taxable income. This means that investors with high incomes are able to pay high prices for properties and outbid first home buyers.
The Impact on First Home Buyers
The impact of the housing bubble on first home buyers in Sydney has been significant. With property prices so high, it is almost impossible for most first home buyers to enter the housing market. This has led to a generation of renters, who are struggling to save enough money for a deposit.
See Related: Why are there so few skyscrapers in Sydney compared to Melbourne?
The Future of Sydney’s Housing Market
The future of Sydney’s housing market is uncertain. While property prices have been increasing at a rapid rate, there are signs that the market is starting to slow down. According to the Domain House Price Report, property prices in Sydney increased by just 0.1% in the last quarter of 2019.
Conclusion
In conclusion, there is no doubt that there is a housing bubble in Sydney. The impact of negative gearing on the housing market has made it almost impossible for most first home buyers to enter the market. While the future of Sydney’s housing market is uncertain, it is clear that something needs to be done to make housing more affordable for everyone.
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