Buying a Sydney house will cost most people $1 million or more by year's end.
The Domain Group’s Home Price Report showed that the median price for a fully detached house in Sydney rose 3.6 per cent in the first three months of the year to be over $914,000.
REINSW president Malcolm Gunning said if that rate continues for the remainder of the year house prices will pass the $1 million by the end of 2015.
However, he added that housing affordability problems in Sydney could see an exodus of skilled workers, whose talents could be used in any large city or small country town.
“Home ownership matters. How do we expect to keep our best and brightest? Our nurses, firefighters, policemen and teachers?” He said.
“Given the average person in NSW had yearly earnings of $77,600 in the last quarter of 2014, even in a two income family who can afford a house in Sydney?”
In the past few years home prices in Sydney have enjoyed double digit growth, about twice the pace of next best performing city, Melbourne.
The most recent report from CoreLogic RP Data showed that home prices in Sydney rose 14.2 per cent in the past 12 months, almost twice the pace of Melbourne’s 7.4 per cent rise.
Mr Gunning is calling on the NSW government to take action to make housing more affordable by encouraging more home to be built, which should slow price rises.
“It is time for the NSW government to provide a solution in the form of the removal of property taxes,” he said.
“It is also important to free up our planning system to help with supply issues that are acting to drive prices up.”