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House prices have increased at three times the rate of wages in Australian capital cities over the past decade, a research paper suggests.
"We note that while wages have increased 56 per cent on average, house prices in Australia's major capital cities have increased 168 per cent since June 1997. Despite overall house prices in Sydney remaining flat in the last 12 months, data across the city varies significantly," the report by Deutsche Bank analysts Emily Behncke and Sally Clarke said.
They said house prices in Sydney suburbs Woollahra and Hunters Hill had increased by as much as 15 per cent over the year to March 31, while prices in the western suburbs dropped by as much as 13 per cent.
New South Wales housing had been softening since September 2002, they said, pointing to data that showed the number of new housing starts had fallen by 41 per cent since that time.
The report said higher rents, low vacancy levels and flat approval levels for building implied the market was near the bottom of the cycle. Several companies mentioned improvements in parts of the NSW property market, and expected a recovery next year. Queensland had the most robust market, with housing starts gaining 8 per cent in the June quarter.
-AAP
