Homes are achievable for an average income earner in just six suburbs of Australia’s most expensive city.
Sydney is considered the second most expensive city in the world after Hong Kong when real estate prices are compared to incomes.
But in the west of the city, a handful of suburbs near Mount Druitt are viable for someone earning a slightly above-average salary or less than six figures.
RateCity calculates that someone who earns $95,481 a year — slightly more than the median full-time salary of $94,000 — can borrow $525,800.
That means this person can buy a $657,250 home with a 20 percent mortgage down payment of $131,450.
The debt-to-income ratio of 5.5 would be slightly below the Australian Prudential Regulation Authority’s “six” threshold for mortgage stress, following 12 Reserve Bank rate hikes since May 2022.
Homes are viable for a middle-income earner in fewer than half a dozen suburbs of Australia’s most expensive city (pictured is a home in Tregear that sold for $620,000 in May, a level slightly above the suburb’s median of $ 607,393)
A median salary of $94,000 is higher than the $65,000 of a middle-income earner, as top salaries make the median higher.
While an earner with an average income of $65,000 has no hope, someone with just over $95,000 has some limited choices in western Sydney.
Mount Druitt itself, with a median home price of $801,099, is overpriced despite being the setting for the SBS comedy Housos (about housing commission housing) and the documentary Struggle Street.
However, neighboring suburbs are a possibility with Hebersham having a median home price of $651,910 and Blackett homes with backyards typically costing $624,490, data from CoreLogic shows.
Dharruk houses have a median price of $639,369 compared to Shalvey’s $635,613.
Lethbridge Park is even more affordable at $617,229, while Tregear is even cheaper at $607,393.
Houses in these suburbs, more than 45 km from the city, typically sell for less than half of Sydney’s median home price of $1.294 million.
They are also significantly cheaper than the median price of a Sydney apartment of $797,806.
Suburbs west of Mount Druitt are affordable for a median income earner with Lethbridge Park having a median home price of $617,229
The other major centers of Western Sydney tend to be much more expensive when it comes to buying a home.
Sydney’s most affordable suburbs to buy a home
LETHBRIDGE PARK: $617,229
Source: CoreLogic median house prices in June 2023
Campbelltown has a median home price of $777,022, but nearby Airds has a median price of $680,183, which is still too expensive for an average income earner.
Penrith’s median house price of $839,238 is also out of range, as is Parramatta, where $1,375,084 is the median price.
That makes apartments the only choice for those who want to travel within a reasonable distance from the city.
But in other parts of Australia, $650,000 buys a lot more.
It is more than the median home price of $606,563 in Perth.
For a little more than that, it’s possible to buy a home in Hamilton Hill, near the beach and 15 miles south of town for $615,037.
In Melbourne, a middle-income earner can buy a house for $656,353 in St Albans, 25 km northwest of the city.
In Brisbane, a house in Acacia Ridge, 18 km south of the city, buys $636,903, while in Adelaide, a house in Ferryden Park, just 12 km north of the city costs $624,268.
The American think tank Demographia this year had Sydney as the second least affordable city in the world, when house prices were compared to incomes, after Hong Kong.
Sydney overtook Vancouver in Canada last year because it was particularly unaffordable.
Someone now taking out a new loan to buy a home in the most affordable parts of Western Sydney would now pay $3,269 per month on a variable rate of 6.34 per cent with the Commonwealth Bank.
Economists from Westpac, NAB and ANZ expect the Reserve Bank of Australia to raise interest rates again in July and August, pushing cash rates to a 12-year high of 4.6 percent from an 11-year high year of 4.1 percent. now.
This borrower buying in Sydney’s cheapest suburb will see his monthly repayments rise by $173 to $3,442, while his variable rate rises another 0.5 percentage point to 6.84 percent.
Mount Druitt itself (pictured), with a median home price of $801,099, is too expensive, despite being the setting for the SBS comedy Housos (about housing commission housing) and the documentary Struggle Street