COVID-19 has opened up a six-month window for Sydney buyers to get into 139 middle-ring suburbs that have become affordable but will quickly move out of reach again if Australia can shake off the pandemic and the economy recovers.
The half-yearly Affordable & Liveable Property Guides report by real estate agency PRD found housing affordability has improved significantly in Sydney, lifting the number of affordable suburbs within 20 kilometres of the CBD by 16.8 per cent, compared with the second half of 2019.
‘‘ The cooling in Sydney’s median property prices in early to mid-2019 has led to more suburbs identified as affordable in the first half of 2020, however prices could also swing back rapidly if the virus is contained,’’ PRD chief economist Diaswati Mardiasmo said. ‘‘ Sydney prices tend to move really fast.’’
To gauge affordability and liveability, the report takes into account the average loan size for each state or the amount the lenders are comfortable lending to people without creating distress.
The capital city median price, the amount of commercial and infrastructure developments going into the area as well as the level of amenities and crime rates, are also considered.
‘‘ A suburb is affordable in our view when you only have to contribute 60 or 70 per cent of your own money, instead of adding 110 per cent, which is the norm, to buy a home,’’ said Dr Mardiasmo.
‘‘ What’s considered affordable for each market varied, due to different price points and measurements.’’
The report showed a lesser boost to affordability in Melbourne, where 103 suburbs were now deemed affordable, a slight improvement from 100 suburbs in the previous report.
Brisbane now has 113 affordable suburbs, up from 91 suburbs previously. The Queensland capital has become the most affordable city for first home buyers, snatching the crown from Hobart.
In Hobart, 45 suburbs have become affordable, a 73 per cent jump from the second half of 2019 when Tasmania’s housing markets were booming.
The softening of home prices in Sydney and Melbourne has given buyers wider options, but not for long.
‘‘ Sydney and Melbourne buyers roughly have about six months before prices move again,’’ Dr Mardiasmo said. ‘‘ The pace is different in each market, but Sydney and Melbourne travel at a faster pace. They are more volatile compared to Brisbane. In Brisbane, buyers have a wider window to enter the market due to the housing market’s slower growth pace.’’
Rockdale, in Sydney’s south, was PRD’s top choice for first home buyers and investors due to its affordability and potential for future price growth.
‘‘ Rockdale has wide-ranging access to amenities, public transport and shops, as well as low crime,’’ Dr Mardiasmo said. ‘‘ A development pipeline of $46 million in the first half of 2020 will see a diverse range of projects, which will stimulate the local economy and have a positive spill-over impact on the property market.’’
In Melbourne, Altona and Oakleigh South offered promise, while Kingston in Hobart was also a good bet for buyers and investors.
Barring a catastrophic spike of the coronavirus, the capital city markets were on track to finish the year strongly, she said.
‘‘ As long as we don’t get a big second wave, our capital city markets will rebound strongly. At the moment several cities have taken a little bit of a battering, but as soon as things stabilise we should see a great recovery for capital city markets.’’
No Deposit House and Land
1800 693 477
$25,000 HomeBuilder Grant
Make or break.
At Enigma the current $25,000 HomeBuilder Grant, I am seeing, is allowing those customers who normally wouldn’t qualify, qualify. For a lot of people it’s a huge make, and that little is going a long way right now. I am seeing a lot of clients come through where without that $25,000 it wouldn’t be possible for them to get into a home. They are just scraping in if they act now and utilise it.
