Historically low interest rates, an unprecedented period of continuous economic growth and strong levels of migration have contributed to the ever-escalating real housing prices in Australia’s capital cities.
Despite news that Sydney house values fell for the first time in 17 months in the September quarter, the city still remains the least affordable in Australia.
Declining affordability for Sydney-siders has now reached another milestone -- with data indicating that there are no suburbs in Sydney with a median price under $500,000.
According to Domain Group data, five years ago there were 159 suburbs with median house prices under $500,000. Domain reported that in March this year there were only four suburbs and by June that had dropped to one -- Willmot, located about 50 kilometres west of the Sydney CBD.
Now, the closest median house price to $500,000 is Tregear at $510,000, followed by Willmott at $515,000.
Domain Group chief economist Andrew Wilson said it’s a stark reminder of how unaffordable Sydney has become for entry-level buyers.
Prices at the lower end of the property market were continuing to climb, despite Sydney’s overall median price declining in the September quarter.
“There will always be pressure from the bottom prices upwards, even as the market slows, as many people are still scrambling to buy in,” Wilson said.
Suburbs with a median house price under $600,000 are also in short supply according to Domain – with 17 suburbs in this category out of hundreds in the Greater Sydney basin.
This includes the cheapest suburb Tregear, but also neighbouring Willmot, Blackett and Mount Druitt – all western suburbs within the Blacktown area.
“Sydney has now waved goodbye to the half-a-million dollar mark, and it’s possible a surge in first-home buyers is behind this,” Wilson said.
Sydney's Cheapest Suburbs
These are the 17 suburbs in Sydney with a median price under $600,000.
PRDnationwide reported that New South Wales’ home loan affordability increased by 3.7 per cent over the past 12 months, to 27.7 index points, in research that showed that while housing is still costly, affordability measures have actually increased around Australia.
In another measure of Sydney's ranking in property pricing, the city has just landed in fourth place after overtaking London as one of the world’s most expensive cities for international students.
Image: Domain, Ben Price Estate Agents