House and Land Prices in Sydney: 1925 to 1970

Abstract

This paper describes and explains house and land prices in Sydney from 1925 to 1970. Between the late 1920's and the late 1940's, real estate values fell in real terms by around 20 per cent. Depressed incomes and expectations and rent control held down prices despite the fall in real interest rates, the real increase in the money supply, the increase in population and the slump in new house completions. In the post-war period, real land values rose by around 250 per cent and real house prices by 200 per cent. These real increases are explained by negative real interest rates and a relaxation of rent control in the early 1950's, by increasing incomes and expectations of capital gain, by increases in the population and by the rising quality of houses. The increase in the housing stock was insufficient to restrain the increase in the real prices of housing.