As of July 1, NSW first home buyers will not have to pay stamp duty for both new and existing homes for properties up to $650,000, with the duty reduced for amounts between $650,000 and $800,000.
According to Domain, the median house price within 10kms of Sydney’s CBD is just over $2 million. If you’re willing to travel between 11-25kms, you can buy a house for a median price of $1.36 million, whilst the best deals can be found beyond 25kms out of the CBD, with the median house pricing sitting at $770,000. Even so, this is still more than $100,000 over the stamp duty exemption figure of $650,000.
There is a little more optimism when it comes to apartments, with the median price within 10kms of the CBD at $920,000. Between 11 and 25km, you can pick one up for a median of $695,000, which then drops to $620,000 beyond 25kms of the CBD.
First home buyers increasingly need to compromise on either size, quality, or location to achieve their dream of becoming homeowners. No longer able to afford a home near the CBD, young buyers are moving West in droves.
According to REA Group, the closest suburb to the city with a median house price of $650,000 in the last year is Carramar, which lies between Villawood and Cabramatta, and is 23kms from the CBD.
Sydney’s South West has seen unprecedented growth in recent years as families are moving to the area to take advantage of the more affordable real estate options.
The Australian Bureau of Statistics figures revealed Camden’s new suburbs within the Cobbitty-Leppington area makeup the fastest growing area in NSW, with more than nine residents moving in each day. Comprising of Leppington, Gregory Hills, Gledswood Hills, Oran Park and Cobbitty, the area’s population rose by 28 per cent between July 2015 to June 2017.
Many who aren’t prepared to make the move west have resigned to lowering their expectations about size and quality of affordable dwellings closer to the CBD.
“I bought an older two-bedroom apartment because I only wanted to live in the Inner West. I always imagined my first property being a house, but it’s just not possible in today’s market to tick all of your boxes,” Erskineville resident, Clare Wells, told Jobsite.
Some have given up on Sydney all together, with first home buyers increasingly looking at regional areas like Wollongong, the Central Coast, and Newcastle in order to afford a home whilst maintaining a coastal, metropolitan lifestyle.
Umina resident, Mykayla Carr, told Jobsite that she has noticed an influx of Sydneysiders making the move to the Central Coast suburb. Umina is one of the first suburbs North of the CBD with a median house price under $650,000. Commuters will need to travel 85kms to the CBD to enjoy its median house price of $615,000.
However, Carr believes this won’t be the case for much longer.
“Umina is now the most populated suburb on the Central Coast, and property is in high demand, so much so that we’re even seeing only fibro houses selling for over $600,000.”
“My family bought our 4-bedroom house 7 years ago for $585,000, it’s now worth between $950,000 and $1 million – that’s almost double the value in just 7 years.”
For those not willing to compromise, ‘rentvesting’ is also on the rise for those who want to maintain their lifestyle whilst also entering the property market. In recent years, there has been a surge in first home owners buying investment properties in more affordable areas or cities, and then renting in the area they want to live in whilst taking advantage of capital growth.
Whilst the new scheme does alleviate some pressure on first home buyers, there is still a long way to go until housing becomes affordable for the average Sydneysider.
Steven Kadry, Director of Delton Financial Group, says: “With the way Sydney’s house prices are going, it’s no wonder people are struggling to get their footprint on the market. The new scheme is a welcome reprieve; however, until we see major reform, people will still need to make compromises to get into the housing market in Sydney.”