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Canberra Times
16 hours ago
- Business
- Canberra Times
Can you nab a home alone in Australia's priciest city? It's not easy, but we've found some buys
Buying your first home in Sydney has always been hard. Now, it's near-impossible - especially if you're doing it on your own. The Sydney lifestyle is attractive but it's difficult to get a foot in the property door if you are single. Pic: Shutterstock With apartments regularly listed for over $1 million and houses well beyond that, the average first-home buyer is increasingly shut out of the market. With a changing work landscape where many employers are requiring staff back in the office, living far from the CBD is no longer the easy fix. Sydney is one of the world's most expensive property markets. A Demographia study last year ranked it the second-least affordable city globally, second only to Hong Kong. According to recent Cotality data, nearly two-thirds of Sydney's housing stock is priced above $1 million (a record-high 64.4 per cent). "This is unsurprising given the median value of all houses and units in greater Sydney was $1.195 million in April," said Head of Research at Cotality, Eliza Owen. "Even for those with a budget of $1 million, the kind of property available in Sydney is generally smaller, and further afield than a decade ago." Dual incomes the unspoken standard Australia's housing market is leaving solo buyers behind. Wage growth hasn't kept up with surging house prices, meaning a single income rarely stretches far enough. "Your experience as a first-home buyer is really determined by where in the country you're trying to buy," said Sarah Megginson, personal finance expert at Finder. "If you want to buy your first home in Sydney on your own, you need a very high income or help with the deposit - or potentially both. There's no getting around this. "Even a small apartment is going to set you back around $600-700,000. It's completely unaffordable for first-time buyers, even with benefits like stamp duty exemptions and LMI waivers." The crippling state of the market is also changing the demographics historically able to buy property. "The rate of home ownership has gradually declined over time, particularly among younger, low-income households where income cannot keep pace with growth," said Ms Owen. "The average age of first-home buyers has increased, and increasingly wealthy households are stuck renting for longer, which increases competition for low-income, renting households." "These suburbs are definitely areas that appeal to first-time buyers," says Ray White agent Hayden Sacilotto of the St George suburbs of Mortdale, Penshurst, Allawah and Panania. Pic: Supplied Hayden Sacilotto, Principal at Ray White Georges River, sees this struggle play out regularly. "It is almost impossible for first-home buyers on a single income to purchase in most areas of Sydney, especially with reasonable proximity to the city," he said. "My office will sell 150 properties a year and it is rare to see a first-home buyer - single or couple - purchase a home in the St George region without the help of Mum and Dad. "The final stages of negotiations tend to revolve around borrowing money from parents to push them across the line." The borrowing power battle Recent Finder research using ABS data shows that the average first-home buyer loan is about $542,000. That's a huge leap to Sydney's median property value of almost $1.2 million, severely restricting a first timer's buying options. "As a first-home buyer, the major pain points you face are saving up the massive deposit, and affording the sky-high repayments each month," said Ms Megginson. Firsthome buyers are borrowing big in Australia. Source: Finder "We've had two rate cuts this year with more predicted, and that's helpful, but the average first home buyer loan size in Australia is around $542,000, which is a weekly repayment of around $800 - with council rates, insurance and potentially strata fees, you're looking at $1,000 per week at a minimum, before you've even turned on the lights." Canstar research is even bleaker. Recent data shows that if you're on a single income of $100,000 a year you could afford to borrow $338,000. With a 20 per cent deposit, that would mean you could buy a property worth about $422,000. Read: not in Sydney. Essentially, solo buyers adamant on purchasing in Sydney are often left with three options: earn a very high income, get family support, or take on a housemate to help cover costs. The borrowing capacity of single-income households lags behind joint-income borrowers. Source: Canstar Where can single-income first-timers buy under $700K? If you earn the average Aussie salary of $103,000 and don't have family help, but want a two-bed apartment with CBD accessibility, what options do you have? It's a question doing the rounds on Reddit's r/AusPropertyChat, where a hopeful home owner asked for suburb suggestions for a principal place of residence. They requested transport links within 40 minutes of the CBD and amenities like shops and gyms on a $600-$700,000 budget. The community came through, naming areas that barely just fit the brief. Inner southwest: Campsie, Canterbury and surrounds With the City and Southwest Metro line set to open in 2026, these suburbs will have trains every four minutes into the CBD. "I'd check out Campsie, Canterbury and surrounds. Border of inner-west. Train stations and a quick ride into the CBD. Good luck!," said one Redditor. "Lovely neighbourhood!," said another of Campsie, noting that it will only be 18 minutes to Central on the metro. Mr Sacilotto agrees these inner southwestern areas are on the rise. "I definitely think these areas will gentrify as new transport lines are built and become operational," he said. "But watch out for complexes with large strata plans - they can have high insurance premiums and risk of ongoing special levies." St George region: Mortdale, Penshurst, Allawah, Panania Users praised these suburbs for their neighbourhood vibe, local amenities, and sub-40-minute train access to the city. Mr Sacilotto says the appeal is real. "These suburbs are definitely areas that appeal to first-time buyers. Transport, education, proximity to the city and the general feel of these suburbs make them highly desirable," he said. "I live in Mortdale myself and as a young couple, my wife and I love the fact that we have the shops on our doorstep." But affordability is already slipping. "These areas are changing as things gentrify and new complexes have been developed over the last five years, which has further caused house prices to surge," said Mr Sacilotto. "New builds that once sold in the $700,000s are now $920,000 to over $1 million," he said. "As the prices of these new units have risen, older '60s and '70s units followed suit." Mid-western Sydney: Meadowbank, West Ryde, Parramatta Redditors also mentioned these northwest and western areas, though Mr Sacilotto urges caution with particular development. "There is an opportunity there, but I would be extremely wary of more modern builds. Often developers initially keep strata rates low to entice buyers, only for owners to be hit with larger strata fees in the near-distant future." One Redditor highlights the side of Meadowbank with older apartment buildings, around Bank Street and Meadow Crescent. "It's a good spot with a 25 to 30-minute train into the city and it's close to the river with walking and cycling paths, and big parks." Advice for solo buyers The so-called 'singles tax' feels like everything costs more - especially a home. But Mr Sacilotto believes this pressure is felt by all first-home buyers. "There is no easy way around it and I don't believe any initiative from the government will change this dramatically. Whether buying solo or with family help, the market's tough," he said. "A good piece of advice would be to find yourself a real estate agent in the areas you prefer who will be willing to help you and also use a broker to secure your finances - don't go to a bank directly." Ms Megginson recommends thinking creatively. "If owning a home is a goal for you and you prefer to stay in Sydney, it might be worth zooming out a little to consider a range of options," she said.
ABC News
3 days ago
- Business
- ABC News
Property prices lift in May as interest rates fall, analysts expect rises of up to 10pc by early 2026
House prices have continued rising across the country amid interest rate cuts and expectations are that as more buyers return to the market, property values will keep rising. Property analysts think capital city combined dwelling prices could rise between 6 per cent to 10 per cent by late this year or early next year. Data from Cotality (formerly CoreLogic) shows that house prices trended higher in May. Its national Home Value Index recorded another 0.5 per cent in May, taking the national index 1.7 per cent higher over the first five months of the year. The gains were broad-based, with every capital city posting a rise of at least 0.4 per cent through the month. Cotality's head of research, Eliza Owen, says house prices are being fuelled by interest rate cuts — both those that have already happened, but also potential cuts in the coming months. "At the moment another two rate cuts are expected over the course of the year by most of the major banks, and the influence on the market is likely to be higher values and higher sales activity. "Yes you will get a boost to borrowing capacity from lower interest rates, but that still puts an affordable purchase price for many households much lower than where property prices actually are especially when you consider the median house value in the combined capitals is now over $1,000,000. "And I think other factors like rising unemployment, softer wages growth could put a bit of a lid on that growth rate as well." Ms Owen said, off the back of Labor policies aimed at helping first time buyers, there could also be a further rise in buyer sentiment. She noted that while the government's expanded 5 per cent deposit guarantee doesn't 'go live' until next year, some first home buyers may look to get into the market this year to beat the rush of buyers expected next year. SQM's head of research Louis Christopher said he also expects more rate cuts and house prices to rise amid more buyer demand and tight supply of housing. The property research firm is forecasting a rise in capital city combined dwelling prices of 6 per cent to 10 per cent next year. Mr Christopher said the RBA would cut the cash target rate at its next board meeting, scheduled for July 8 by another 0.25 per cent, but it could cut by as much as 50 basis points "if there are any further softening signs for the economy such as a weak GDP growth number and/or a weakening jobs market". He said this will put upward pressure on prices from as early as the September quarter. He expects dwelling values per capital city by next year of: Sydney +3 per cent to +7 per cent, Melbourne +2 per cent to +6 per cent, Brisbane +11 per cent to +16 per cent, Perth +15 per cent to +20 per cent, Adelaide +10 per cent to +14 per cent, Hobart +1 per cent to +5 per cent, Canberra +2 per cent to +6 per cent. He noted SQM research has been recording a firming of auction clearance rates and higher volume activity in very recent weeks. "Other factors contributing to this present increase in buyer demand include the end of the federal election and ongoing increases in underlying demand for accommodation given our ongoing surging population growth rates. "This, combined with ongoing low levels of dwelling completions, are all fuelling the conditions for a short-term surge in dwelling prices." He said while the federal government have also committed to building new homes to boost supply, its target of 1.2 million dwellings completed by FY29 "is very likely to be missed by an estimate of between 250,000 to 400,000 dwellings", which would mean supply relatively to demand remains weak for some time yet. Gino Farina is the founder of mortgage broking business Bondi Broker based in Sydney but services clients across the country. He says rate cuts are already factoring into buyer decisions and another two rate cuts expected this year will see more people be able to get a home loan. He thinks that could further push up demand for housing and thereby prices. "It does increase peoples borrowing capacity … that increased confidence is helping," he said. "We're seeing a mix [of buyers]. We're still seeing the first home buyers … and we [help them] really leverage a lot of the government programs to help those people get into the market. "Investors are still out there but it's obviously more challenging for investors, and also for people looking to upgrade. "What were finding now is buyers are realigning their expectations to what they can afford." Ms Owen said the monthly rise in Cotality's house price index values comes after a short-lived decline of just 0.4 per cent over the three months ending January 2025, with the February rate cut a key factor supporting property price rises. However, she noted that the annual pace of gains in the national index slowed to 3.3 per cent, the slowest twelve-month change since the year ending August 2023. Only Melbourne (-1.2 per cent) and Canberra (-0.7 per cent) have recorded an annual fall in dwelling values. Capital city dwelling value trends are converging, with the gap between the highest and lowest annual changes narrowing to 9.8 percentage points, and it hasn't been this narrow since March 2021. "Markets like Brisbane, Adelaide that were going really, really strong this time last year have slowed down your quarterly growth rate of about 1 to 1.5 per cent. "Meanwhile, cities that were seeing more consistent declines like Melbourne and Canberra are now into positive territory for the Sydney market, which are quarterly uplift of 1.1 per cent." Regional markets are also showing a positive trend, with each of the 'rest of state' markets recording a rise in values through the year-to-date. The strongest gains recorded were in regional South Australia, where values are up 3.8 per cent over the first five months of 2025. Ms Owen said the largest capitals, Sydney and Melbourne, are now among the softest rental markets in the country following a period of extreme rental growth. The slowdown in rental growth across most markets comes despite rental vacancy rates remaining close to historic lows. Every capital city continues to see rental vacancy rates below 2 per cent compared with a decade average of 2.7 per cent across the combined capitals. "The rental market has grown about 3 to 3.5 per cent over the past 12 months and it's a slow down in the pace of growth. "That's down from about 8 per cent in the previous 12 month period. We would expect that that growth [in rental prices] will continue to slow, maybe we'll get a stabilising.
West Australian
28-05-2025
- Business
- West Australian
The Australian suburbs where it's cheaper to service a mortgage than rent
It is more affordable for young Aussies to service mortgage payments than rent in more than 1000 house and unit markets nationwide, new research has revealed. With most of the country struggling with a cost-of-living crisis, weekly rents have soared 39 per cent over the last five years sitting at a median price of $659 a week, while the median mortgage repayment is $922, the study by Ubank found. In almost a fifth of Australian suburbs, the median mortgage repayment is estimated to be within $100 per week of the median rent, and in 7.7 per cent of suburbs, it is cheaper to pay a mortgage than to rent. The research found there were 495 house markets and 597 unit markets where this was the case. This pattern has seen a rise in 'rentvesting', with those interested in home ownership encouraged to assess their financial position and look to buy in a cheaper area, while continuing to rent in their desired location. 'Rentvesting is a strategy where a person rents a property that suits their lifestyle while owning an investment property that fits their budget,' Cotality head researcher Eliza Owen said. 'As inner-city home prices have risen, this approach has become more popular, particularly among younger buyers. 'Initially, it might seem counterintuitive to pay both rent and a mortgage, but it depends on an individual or couple's budget, life stage, and desired lifestyle. 'Rentvesting can offer the best of both worlds, allowing them to purchase a property and rent it out to cover some or all of their ownership costs while continuing to rent the home where they live.' A median rent of $659 a week is equivalent to paying a mortgage on a home worth around $590,000. The research points to a Sydneysider paying a median price of $787 a week, the purchase price would be equivalent to $704,000 – a unit in Canterbury, or a house in San Remo. In Melbourne, the median weekly rent of $610 would get a home worth $546,000 or a unit in Narre Warren, or house in Melton South. Brisbane's weekly median rent sits at $678 a week and is equivalent to a purchase of $606,000. This could score a unit in Zilmere or a house in Leichardt. Those living in Perth and paying the median weekly rent of $713 a week could instead put funds into a purchase equivalent to $638,000 for a unit in Jolimont or house in Maddington. A higher number of young Australians are willing to rentvest in order to purchase their first home, NAB Behavioural Economics data found. Ms Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year. 'Soaring rents coupled with falling interest rates has seen rent vesting on the rise as a growing number of first homebuyer investors choose to rent where they want to live while buying property in more affordable markets.'
Perth Now
28-05-2025
- Business
- Perth Now
Suburbs where it's cheaper to buy than rent
It is more affordable for young Aussies to service mortgage payments than rent in more than 1000 house and unit markets nationwide, new research has revealed. With most of the country struggling with a cost-of-living crisis, weekly rents have soared 39 per cent over the last five years sitting at a median price of $659 a week, while the median mortgage repayment is $922, the study by Ubank found. In almost a fifth of Australian suburbs, the median mortgage repayment is estimated to be within $100 per week of the median rent, and in 7.7 per cent of suburbs, it is cheaper to pay a mortgage than to rent. The research found there were 495 house markets and 597 unit markets where this was the case. This pattern has seen a rise in 'rentvesting', with those interested in home ownership encouraged to assess their financial position and look to buy in a cheaper area, while continuing to rent in their desired location. Many young people are looking to 'rentvest' in order to own their first home. NewsWire / Gaye Gerard Credit: NewsWire 'Rentvesting is a strategy where a person rents a property that suits their lifestyle while owning an investment property that fits their budget,' Cotality head researcher Eliza Owen said. 'As inner-city home prices have risen, this approach has become more popular, particularly among younger buyers. 'Initially, it might seem counterintuitive to pay both rent and a mortgage, but it depends on an individual or couple's budget, life stage, and desired lifestyle. 'Rentvesting can offer the best of both worlds, allowing them to purchase a property and rent it out to cover some or all of their ownership costs while continuing to rent the home where they live.' A median rent of $659 a week is equivalent to paying a mortgage on a home worth around $590,000. Cotality head researcher Eliza Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year. Credit: Supplied The research points to a Sydneysider paying a median price of $787 a week, the purchase price would be equivalent to $704,000 – a unit in Canterbury, or a house in San Remo. In Melbourne, the median weekly rent of $610 would get a home worth $546,000 or a unit in Narre Warren, or house in Melton South. Brisbane's weekly median rent sits at $678 a week and is equivalent to a purchase of $606,000. This could score a unit in Zilmere or a house in Leichardt. Those living in Perth and paying the median weekly rent of $713 a week could instead put funds into a purchase equivalent to $638,000 for a unit in Jolimont or house in Maddington. Australia's median rent price sits at $659 a week, an increase of 39 per cent over the last five years. NewsWire / Max Mason-Hubers Credit: News Corp Australia A higher number of young Australians are willing to rentvest in order to purchase their first home, NAB Behavioural Economics data found. Ms Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year. 'Soaring rents coupled with falling interest rates has seen rent vesting on the rise as a growing number of first homebuyer investors choose to rent where they want to live while buying property in more affordable markets.'
Yahoo
28-05-2025
- Business
- Yahoo
Suburbs where it's cheaper to buy than rent
It is more affordable for young Aussies to service mortgage payments than rent in more than 1000 house and unit markets nationwide, new research has revealed. With most of the country struggling with a cost-of-living crisis, weekly rents have soared 39 per cent over the last five years sitting at a median price of $659 a week, while the median mortgage repayment is $922, the study by Ubank found. In almost a fifth of Australian suburbs, the median mortgage repayment is estimated to be within $100 per week of the median rent, and in 7.7 per cent of suburbs, it is cheaper to pay a mortgage than to rent. The research found there were 495 house markets and 597 unit markets where this was the case. This pattern has seen a rise in 'rentvesting', with those interested in home ownership encouraged to assess their financial position and look to buy in a cheaper area, while continuing to rent in their desired location. 'Rentvesting is a strategy where a person rents a property that suits their lifestyle while owning an investment property that fits their budget,' Cotality head researcher Eliza Owen said. 'As inner-city home prices have risen, this approach has become more popular, particularly among younger buyers. 'Initially, it might seem counterintuitive to pay both rent and a mortgage, but it depends on an individual or couple's budget, life stage, and desired lifestyle. 'Rentvesting can offer the best of both worlds, allowing them to purchase a property and rent it out to cover some or all of their ownership costs while continuing to rent the home where they live.' A median rent of $659 a week is equivalent to paying a mortgage on a home worth around $590,000. The research points to a Sydneysider paying a median price of $787 a week, the purchase price would be equivalent to $704,000 – a unit in Canterbury, or a house in San Remo. In Melbourne, the median weekly rent of $610 would get a home worth $546,000 or a unit in Narre Warren, or house in Melton South. Brisbane's weekly median rent sits at $678 a week and is equivalent to a purchase of $606,000. This could score a unit in Zilmere or a house in Leichardt. Those living in Perth and paying the median weekly rent of $713 a week could instead put funds into a purchase equivalent to $638,000 for a unit in Jolimont or house in Maddington. A higher number of young Australians are willing to rentvest in order to purchase their first home, NAB Behavioural Economics data found. Ms Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year. 'Soaring rents coupled with falling interest rates has seen rent vesting on the rise as a growing number of first homebuyer investors choose to rent where they want to live while buying property in more affordable markets.'
