Sydney property is "cheap": real estate boss

Sydney property is cheap and there’s certainty no crash in sight.

That’s according to the global head of residential at Knight Frank, the UK-based real estate agent, who confirmed Melbourne and Sydney are luring the world’s super wealthy due to ostensibly affordable property prices.

“Within a global marketplace Sydney does look cheap, there’s no doubt about that,” Lord Andrew Hay told Fairfax Media.

In a global context, the two most expensive cities in Australia are “quite affordable,” he claims. “And I don’t think you are heading for a crash.”

The comments come in spite of spiraling house prices in both Melbourne and Sydney – to the tune of 16 per cent and 19 per cent, respectively, in the last year alone, preventing first time buyers and those on average incomes from getting on the property ladder.

Sydney ranks 11th and Melbourne is number 20 on the 40 most desirable global cities for the wealthy elite – known as High Net Worth (HNW) individuals – to live and invest, according to the latest Knight Frank Wealth Report. The Aussie cities are popular due to their less pricey dwellings compared to other global cities like London, New York and Hong Kong.

The report ranks cities by current wealth, investment, connectivity and future wealth.

Nationally, Australia’s inflamed housing market shows no sign of abating. Average home values across all eight state and territory capital cities lifted 13 per cent in the last year – the fastest pace since May 2010, according to data from CoreLogic released this week.

Although Hay conceded there are affordability issues in the Aussie market, he believes its a “sustainable market” with a balanced combination of overseas and local investors. The UK property giant Knight Frank also plans to increase its presence locally, he revealed.

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