First home buyers – Think ahead to get ahead
For some time now, we’ve been hearing that first home buyers are being squeezed out of the Sydney real estate market. However, revised data from the Australian Bureau of Statistics reports that first home buyers, and particularly first home investors, make up almost 20 per cent more of new sales than previously reported.
To get a foot in, buyers will invest in one area whilst they continue to rent in another, foregoing the First Home Owners Grant.
This isn’t a surprising move, says buyers advocate Catherine Cashmore, but it’s important to think long-term and consider family and financial plans.
“The average age of first home buyers is 33 and they are buying as couples. If they know they will want a family home in a particular area, then they need to plan around that now. If they want to buy purely to invest then an apartment is typically a good choice for significant yields,” says Catherine. “It’s getting harder to start small and work your way up.”
The good news is with new major rail links and road works underway – such as the North West Rail Link, and upgrades to the M2/M7 and M5 motorways – the divide between Sydney’s east and west is starting to close.
The NSW State Government’s ‘Growth Centres’ project will also see progressive releases of land for new development. The North West and South West Growth Centres will become new communities for up to 500,000 people with 181,000 homes, providing employment, schools, shops, bushland, parks and infrastructure.
Hospitals in Western Sydney are set to receive $600 million in funding during the next 20 years, and the Parramatta light rail project suggests incoming growth, and that will affect values in surrounding areas.
So what can first homebuyers expect to pay across Sydney’s different suburbs?
Even with the current low interest rates, a low supply of stock in high-demand suburbs is creating a busy market with high prices and competitive auctions. But there are pockets of opportunity.
The Sydney median house price is now sitting around $845,000 and median unit price around $528,000. This of course fluctuates when you break down the geography.
In Sydney’s Lower North, a typical apartment costs about $700,000, and $1.5 million for an average house. The Hornsby area is cheaper, with an average house price closer to $800,000.
The average house price in Western Sydney ranges from about $450,000 to $550,000 in areas such as Blacktown and Penrith, but reaches up to around $700,000 to $900,000 in Baulkham Hills.
The Sutherland Shire, also with good rail links into the city centre, has an average house price of $750,000 to $900,000. The average apartment price is around the $500,000 figure.
You can expect to pay an average between $1 million to $1.3 million for an Inner West house, most of which are part of a row and the average apartment costs about $500,000 to $750,000.
Not surprisingly, the average house price in the Eastern Suburbs is higher than other areas. Randwick is around $1.5 million while Woollahra is over $2 million. But you can still find studio and one bedroom apartments in the inner east for a much more affordable $500,000.
In the current market for first home buyers, thinking ahead will get you ahead.