Sydney Residential Values Fourth Behind Mumbai

Values up 137% over decade: Dublin down -26%

The value of residential property in Sydney has risen 137 percent over the last ten years to rank fourth behind Mumbai (184 percent) in a list of world cities, with the Irish capital Dublin at the other end of the scale showing a capital value growth of -26 percent over the same period, according to Savills 12 Cities Report.

Head of Savills World Research, Yolande Barnes, said ten year residential capital value growth in all global cities surveyed averaged 73 percent to the end of 2015 with Asian cities, including Shanghai (173 percent), Hong Kong (167 percent) and Mumbai, filling the top three positions.

Ms Barnes said the roller-coaster ride of the global financial crisis had presented an opportunity for real estate in new and emerging markets, particularly Asia, to rival those in the West, with price growth in the new and emerging economies averaging 123 percent between December 2005 and mid-2011, compared with just 32 percent in the established cities of the old world - Paris, Tokyo, London, Sydney and New York.

She said while capital growth fortunes reversed in the years since 2011 - old world markets grew by an average of 35 percent and new world markets by just six percent to December 2015 - the Asian cities remained at or near the top of the table, however those cities may now be more fully valued and therefore more exposed to price falls or stagnation, particularly during economic recession.

“Our analysis of occupier demands and rental growth across all sectors (residential and commercial) should prove a good guide to the fundamentals of different markets and would seem to point to the best prospects for capital growth lying among the cities at the foot of the table, which are enjoying population growth and occupier demand from burgeoning digital and creative industries,” Ms Barnes said.

Those nearest the bottom of the table with the lowest rates of growth were in the high-supply US cities of Miami, LA and Chicago, while Dublin’s residential values remain 26 percent below its 2005 levels, although this represents recovery after an incredible fall from its 2006 peak to its 2012 trough of -57 percent.

View the world cities comparison table.

Savills Australia’s National Head of Research, Tony Crabb, said while it was unlikely the same very high level of growth our key cities had achieved in recent years was sustainable in the long term, Australia’s strong property fundamentals, including robust population growth, would nevertheless underpin a continued high level of performance particularly along the eastern seaboard.

“Australia’s population growth is amongst the strongest in the world and is the strongest in its history. This creates ongoing demand for residential property as well as retail goods and services which feeds into logistics, warehousing and manufacturing and ultimately demand for office property and the two cities which will benefit the most from this trend are Sydney and Melbourne.

“As the population of these two cities is set to double over the next 35 years, the key driver of long-term growth is in place, and that should see Sydney remain near the head of the table in the medium term,” Mr Crabb said.