If you thought that Sydney property prices
couldn’t get any more ridiculous then you might just want to think again.
According to the latest data from CoreLogic, there were more Sydney suburbs at the end of 2016 with a median house value of $2 million plus compared to those with a median house value of less than $600,000.
The CoreLogic data shows that 14.2 per cent of Sydney suburbs had a median house price of $2 million or more, compared to 11.2 per cent which had a median house price of $400,000 - $600,000.
More affordable property opportunities in other capital cities
It’s little wonder why so many Sydney buyers are struggling to get on the housing market with prices soaring this high. In comparison, you are much better off buying in some of Australia’s other capital cities which are seeing far more affordable prices. Brisbane comprises 28.8 per cent of suburbs sitting within the median house price bracket of $200,000 - $400,000, whilst Hobart has more suburbs within this price range than any other price range.
If you do your research then you can even buy a property within the $200,000 - $400,000
price bracket in Melbourne, where 6.3 per cent of suburbs still comprise stock in this price bracket.
Units under $400,000
For units, then the number of suburbs with a median unit value of less than $400,000 comprise just 6.5 per cent in Sydney, compared to 31.8 per cent in Melbourne, 62.7 per cent in Brisbane, 85.1 per cent in Adelaide and 88.4 per cent in Hobart.
For those looking to buy in Sydney though then you will find that this is the only capital city where the majority of suburbs have a median house price above $600,000. At the end of 2016, 20.5 per cent of Sydney suburbs had a median value of less than $600,000, compared to 38.5 per cent of suburbs which had a median value of at least $1 million (houses and units).
According to CoreLogic Head of Research Australia, Cameron Kusher, “It has got to be depressing for someone in Sydney looking to buy a property. Even if you look at the unit market in Sydney, only 6.5 per cent of suburbs have a median unit value below $400,000. Even though units are more affordable, there is not a huge amount of supply at the lower end of the unit market either.”
Buying Sydney Apartments Just as Challenging
Although Sydney apartments are much more affordable compared to houses, finding and buying an affordable apartment in Sydney is just as challenging, particularly for lower income earners. As a low-income earner
in Sydney looking to own a home in Sydney, then this is becoming less and less possible as the gap between wages growth and property price growth continues to widen. Buyers also need to take into account the higher competition to go up against as the amount of more affordable housing in Sydney declines.
So, how can you get on the property ladder when living in Sydney?
Unfortunately, for many Sydneysiders owning your own home in Sydney might not be possible – yet. If you want to own a property, and the Sydney market is pricing you out, then there are a few strategies that we suggest you think about first.
3 Strategies for Sydney Buyers to Own a Property
1. Buy Off the Plan
Although buying in Sydney is expensive, buying an apartment off the plan can provide you with more affordable options, plus provides you with valuable time. You only require a 10 per cent deposit initially, and then you don’t need to pay anything else until completion which might be 18 months or more away. This gives you adequate time to save up more money to use as a larger deposit or to start building up your savings again for emergency. The earlier you buy within an off the plan development, the lower the prices, so it pays to get in as early as possible to benefit from the lower entry prices. Sometimes, developers might even be offering incentives such as higher finishes, free blinds or stamp duty savings to get buyers through the door.
Another popular strategy which many of our clients are taking advantage of right now, particularly Gen Y is to invest first and continue to rent where you are. This is known as Rentvesting
. Rentvesting allows you to buy a property in a high growth area to capitalise on capital gains, whilst still allows you to live in an area you want to benefit from the lifestyle. For those who live in Sydney, you can take advantage of a higher wage and buy in a capital city such as Brisbane which still has properties around the $400,000 mark.
3. Buy Together
Buying with a partner, a family member or friend can also get you closer to owning a property. Splitting the costs down the middle can make saving a deposit far easier.
Sydney buyers need to change their property tactics
As the median property price in Sydney continues to creep up further, property buyers in Sydney and across Australia need to get smarter and change their tactics of how they approach buying a property. Although, you might want to own your own home first, the reality is that many of us in Sydney are now unable to do so. Investing in property interstate can give us a real chance of owning a property and getting a foothold on the property ladder, whilst allow us to build up some equity in order to purchase another property investment to expand our property portfolio, or to buy a property later on in Sydney to live in.
Realistically, simply saving up money in a savings account will not keep up with Sydney price growth so it’s in your best interests to take a step back, look at other strategies and find an alternative way to get on the property ladder, whether you invest interstate, buy with friends or family or lower your expectations and buy something smaller first.
To discuss what property strategies could benefit you most, enabling you to get on the property ladder sooner, it’s best to speak to one of our iBuyNew Property Consultants. Our expert Property Consultants have years of experience working within the property market and can guide you on the best off the plan apartments, townhouses and house and land packages we currently have available.
Call us today on 1300 123 463
to find out more and to learn the importance of acting sooner rather than later.
Published on 28th of February 2017 by Marty Stanowich