Sydney homes better than New York & Paris?

If you're new here at 2thinknow, and you're interested in the latest ideas on economics, cities, trends and innovation, subscribe to our RSS feed. Thanks for your visit!

ANALYSIS, Sydney — Property prices in Sydney (and other Australian capitals) are more expensive than almost any city in the world.

New York? Paris? Boston? Vienna?

In general, better value than Sydney, as has been reported in numerous media stories today. Property prices are at 7.5 average median earnings.

And we’re not talking Park Avenue property here, more like Queens.

Sydney suburban Bondi is a sleazy second rate suburb, not comparable to Park Avenue. Yet property is priced in the millions of dollars.

There seems little doubt that Australian capitals of Sydney, Melbourne, Brisbane and Perth property are over-valued.

In Paris I have seen beautiful Left Bank apartments for under USD $1,000,000. And Paris is in the centre of Europe.

Distance is the main reason Australian property is overvalued

Sydney is 13 hours minimum travel time from the world’s super power.

West Coast USA, is close, New York further, and most other major US cities are a long way in travel time from Sydney.

Europe is more than 21 hours flying time ex-Sydney to a hub, let alone a final destination.

How can a small city of 3-4 million people, as in Sydney and Melbourne’s case, have properties worth more than a capital of finance, influence and culture?

In short - Sydney, has a harbour, but no culture. (As a librarian observed to me privately, Sydney has beautiful libraries that no one uses… )

New York has a culture, and a CBD like Manhattan which is a 130+ streets long, and has the variety of Tribeca, Park Ave, Fifth Ave, Wall St, Upper East Side, Chinatown, Bowery & Little Italy…

Further property standards in Sydney are far lower than most global capitals when ranked on construction, industry standards or materials according to European and American tradespeople I have met.

There is no cultural comparison between an uppish Sydney and New York or Paris, or the top European capitals…

Unless …

Property price rises was part of the far-Right’s debt-filled asset bubble. No labor for income, just asset interest. No need to work, just wait for your house price to rise.

Many Australians have been doing just that.

Now they don’t want to accept a falling market. Asset bubbles don’t last.

But as property prices start to fall over coming months and beyond, those same people will cry ‘foul’.

Why must Australian property prices fall ?

There is no intrinsic (other than manufactured) shortage of land in Australia.

Australia is a long way from European capitals, and European population. And the USA and Canada. And even much of Asia.

London prices are high, but the small UK aisle holds many times more people than Australia, and is a comfortable 7 hours from New York, and a commuter 2 hours flight from most of Europe.

In a global world, it is only Australians who value their property so highly.

Property is Australia’s tulip bubble.

But once the foreign debt Australia is borrowing dries up, then property prices will plummet.

Intrinsic value is what prices reflect, long-term.

And Australian property and cultural exchange is not as globally valuable or easy as New York or Paris. Or London.

Full stop.

Christopher Hire:

Author of the Global Innovation Review, and Chief Editor of this journal. Focussed on innovation, innovation cities and positive social change globally.

Architecture, Design, Urban, Arts & Culture, Asia, China & Australia, Australia, Canberra, Cities & Regions, Economics, England, Features, France, Global, London, Melbourne & Victoria, New York NYC, Paris, Perth & WA, Sydney & NSW, USA, USA & Canada, Work, Family & Home, [English]
Australia, Australian property prices, Credit crunch, Macquarie bank, property, property around the world, real estate, sub-prime crisis