First-time homebuyers looking to enter the market in the shortest possible time will find themselves in remote suburbs barely within reach of the capital’s CBD, new figures reveal.
New Domain’s Analysis First-time home buyer report lays bare the grim reality of housing affordability in some of the major capitals, revealing the suburbs where it takes first-time homebuyers the fastest to save for a 20% deposit on entry-level homes pushes buyers to the periphery, and, in some cases, outside the capital cities.
The results are dire in Sydney, with first-time homebuyers looking in a handful of central coast suburbs closer to Newcastle than in the port city, the data shows.
The trend is similar in other capitals, where rising house prices have pushed affordable properties further from city centers.
First-time home buyers were “geographically excluded from the capital’s housing markets,” said Laurence Troy, professor of town planning in the School of Architectural Design and Planning at the University of Sydney.
“It’s almost impossible [to buy a house], to the extent that people are actually buying what is outside of capital cities and going there, ”Dr. Troy said.
He said that while some have finally made it past the growing deposit hurdle, it has come at a cost for many first-time homebuyers.
“Right now it’s a game you can’t win. Yes, it takes a decade to save a deposit on a reasonable income, but if the prices go up in a decade you can’t catch up, you’re falling further and further behind.
Domain’s senior research analyst Nicola Powell said soaring home prices are increasing the time to save for a home in almost every pocket in Australia.
“It is difficult to access the market and that means affordable housing is on the outskirts of our capital,” said Dr Powell. “The time it takes to save is all the shorter the further you move away from CBD.”
In Sydney, the fastest time to save for a 20% deposit on an entry price home was just over three years in Chain Valley Bay – 84 kilometers north of the city on the central coast but at only 32 kilometers from Newcastle.
In fact, the top five suburbs were in the neighboring areas of the Lake Macquarie region, which is still part of Greater Sydney, according to the Australian Bureau of Statistics boundary map.
First-time homebuyers have flooded the local market because it was more affordable than home prices in Sydney and still within a reasonable driving distance of the city, said Tracy Gaven, of Stone Toukley and Long Jetty.
She said buyers even told her they wanted smaller, more affordable mortgages that they could pay off with just one income.
“People don’t want to have these big mortgages because they might not have a job someday,” Ms. Gaven said. “It’s more affordable and people love this way of life. “
The fastest place a first-time home buyer could save a 20% down payment was in Melton, 35 kilometers west of Melbourne, where the entry-price home cost $ 380,000 and took about three and a half years to save.
The top 10 remaining suburbs left first-home applicants between 30 and 40 kilometers outside the CBD if they wanted to access the housing market as soon as possible.
Dallas was the closest suburb to Melbourne that allowed buyers to enter the housing market after saving for about four and a half years.
Damien Spiteri of Hocking Stuart Melton said many first-time homebuyers are pouring into the Melton area because they were billed out of their first preference suburbs closer to the city.
“We are still a very cheap market, probably the cheapest market within a 50 kilometer radius of the CBD,” Mr. Spiteri said.
“A lot more are coming out because it’s more affordable than the surrounding suburbs,” he said, adding that many were able to buy a larger house or a house of the same size that they missed closer to the CBD for. $ 100,000 cheaper.
Even in Perth, where house prices are more affordable than in major capitals, first-time first-time buyers can enter the housing market in two years in Armadale, 16 miles from downtown Perth.
It was followed by even more remote suburbs, leaving buyers more than 20 miles away if they save for an entry-price home in Medina and Orelia, both south of Perth.
Research assumes that a couple with the average income for a 25- to 34-year-old man in their city can save 20% of their after-tax income each month, deposited into a standard online savings account. It excludes transaction costs associated with the purchase of a property. Entry-level homes are based on the 25th percentile, or the cheapest quarter of homes for sale.