Even Buying Units Now Very Unaffordable For Families
Want to buy a unit? Moving to Brisbane may be your best bet
As more families and first homebuyers reluctantly and begrudgingly accept that a standalone house may be out of their reach in Australia, new data shows even buying an apartment close to a major city will be a hard ask for many.
Housing affordability is one of the hottest issues in Australia, with report after report showing how expensive and often unattainable property is around major cities, particularly Sydney and Melbourne. Charities and housing organisations say government is "asleep at the wheel" on the issue, with international reports consistently ranking Sydney as the second most expensive housing market in the world.
Latest analysis from RiskWise Property Research, investigating the price-to-income ratio -- that is, how many years of average income it would take to purchase a property -- has found the median unit price in the Greater Sydney region is up to 8.5 times the median income in that city. At a median price of $773,500, and average size of 95 square metres, Sydney apartments are still out of reach for many.
"Experts are recommending families embrace living in units so they can enjoy good proximity to amenities and public hubs, however, what we have found is that while the median unit price sounds relatively reasonable, it is not a viable option for the vast majority of the families looking for decent-sized units suited to their lifestyle,” RiskWise CEO Don Peleg said.
RiskWise also estimated prices for a 105 square metre apartment in Sydney -- approximately three bedrooms, two bathrooms -- finding that price to be around $847,000, or 9.3 times the median income.
"The estimated price of a unit with a reasonable size, that should be considered as an alternative dwelling option to a house, is $847,000 and that is very high,” Peleg said.
"That’s significantly higher than Melbourne, the second least affordable capital city in Australia, which has a ratio of 7.5."
Things were better in Melbourne, with the median unit price of $550,900 (for a unit 95 square metres on average) being 6.9 times the average income. The estimated price for a 105 square metre unit, $603,000, was 7.5 times average income.
Greater Brisbane, however, seemed to fare the best. It had the largest average apartment size of any city, at 112.3 square metres, and also one of the lowest price-to-income ratios at 4.6.
Darwin had the lowest price-to-income ratio at 3.4, followed by the ACT at 4.1.
"Units in Brisbane... are the most affordable in price-to-income ratio among all the major capital cities," Peleg said.
"Not only is Sydney the least affordable capital city, the estimated price for units in the inner and middle rings of Sydney, where the experts are recommending families go in order to buy ‘more affordable’ properties and enjoy the lifestyle those areas offer, is very high."
The least affordable suburbs in Sydney are in the eastern suburbs, with a 12.0 price-to-income ratio; the northern beaches, at 11.4; and north Sydney and Hornsby, at 11.1.
“It is unsurprising that Sydney is experiencing a strong negative intra-state migration, that is largely driven by housing affordability,” Peleg said.
“Policy makers need to take these findings into consideration in their long-term planning strategy in order to ensure Sydney will be an affordable place for families in the future."