Sydney’s property boom has passed its fifth year, and prices have risen by $100,000 a year on average.

Five-year boom has had an impact on real property’s value. Domain Group’s Jennifer Duke says it has altered the geography of Sydney, creating a significant divide between the haves and the have-nots. It encouraged property investments.

Five years ago, Sydney’s median house price was a modest $646,000. Domain Group’s most recent data shows that today’s median home price is $1.15 million. This has created a significant divide at Harbour City with property millionaires splitting off from permanent renters.

These are just some of the many ways Sydney’s property boom has impacted it.

1. The bottom rung on the property ladder has disappeared

With the Reserve Bank’s interest rates at record lows, those who already own homes are benefitting immensely. People who own a mortgage have seen rate cuts as one of the main factors in the boom.

The obvious winners of the property boom are the Sydneysiders who’ve seen the value of their homes surge over the past five years and their mortgage payments shrink, according to Andrew Wilson, Domain Group’s chief economist.

Sydney now has 78 suburbs where the median home price is at least $2m. This is an increase from the six that were in 2012.

It is more difficult to save for a deposit because of the lower rates.

First-home buyers are less able to afford suburbs. There were more than 150 places with median house prices below $500,000. Only four areas could boast such low median home prices in 2017,

“If you’re not on the ladder, you’ll find there isn’t a bottom rung anymore,” Wilson said.

2. Investor culture is now the norm

Robert Mellor (Managing Director, BIS Economics) stated that Sydney’s traditional homeownership rates were between 70% and 30%.

Now, it’s more like 60/40, he said.

In just a few months, more than half the properties on the market in NSW were purchased by investors during the height of the boom.

“This was in part due to the snowball effect in the housing market, and exuberance and growing equity as prices increased, but was also a phenomenon of investors looking for different asset classes post-global financial crisis,” Duke said.

3. Inequality in the city is on the rise

Bill Randolph from UNSW City Futures Research Centre claims that Australia is witnessing an asset-based divide. This is driven by both differential superannuation wealth and property wealth.

He warned that the Sydney boom would lead to “class-based as well as inter-generationally based inequality,” with the winners being those who owned property or whose parents owned property in the right location.

“I think we are at something of a turning point in housing wealth that will be much more down to cumulative inherited outcomes – including access to ‘good’ education, jobs and opportunities as a well as housing wealth – rather than what you do for yourself, which has been the case for the last couple of generations,” he said.