Young Australians on a tight budget who buy a small apartment in a more exclusive postcode rather than a house in a less posh area are less likely to strike it rich.
Before the pandemic, units in Waitara on Sydney’s upper north shore and homes in Blacktown on the city’s outer edge were selling for less than $540,000 in 2019.
But five years later, the median home price in Blacktown is $970,000 and very few sell for less than $900,000, while one-bedroom units in Waitara only sell for $535,000, despite being next door. from luxurious Wahroonga.
In five years, the median house price in Blacktown has risen 49.4 per cent, while one-bedroom units in Waitara are selling for less than in 2019.
In 2019, before the pandemic, units in Waitara on Sydney’s upper north shore and houses in Blacktown on the city’s outer edge were selling for less than $540,000 (including this house which sold for $535,000 in February 2019).
Young Australians on a tight budget who buy a small apartment in a more exclusive postcode rather than a house in a less upscale area are less likely to strike it rich (pictured is a unit that sold for $539,000 in October 2019).
Nerida Conisbee, chief economist at Ray White, said one-bedroom units didn’t make as much sense in a family suburb like Waitara, which is close to several schools.
“If you’re building a lot of one-bedroom apartments in a family suburb, that would probably make less sense than building slightly larger apartments,” he told WhatsNew2Day Australia.
But house prices in Blacktown have also soared following the construction of a new Metro West train line in western Sydney, in a suburb that is also close to the M7 and M4 motorways.
“A lot of this has to do with investment in western Sydney in terms of infrastructure and roads,” Ms Conisbee said.
“Sydney is growing, so suburbs like Blacktown, five or ten years ago, might have been considered a bit out of the city, but Sydney has gotten bigger and is starting to look a lot more desirable from that perspective.”
In one comparison, a three-bedroom house in Blacktown on a 556 square meter block sold for $535,000 in February 2019, which at the time was below the suburb’s median house price of $649,450.
In March 2024, another three-bedroom house, Blacktown, on the same sized block, sold for $967,000, or slightly below the suburb’s median of $970,030.
In Waitara, an 84 square meter one-bedroom apartment sold for $539,000 in October 2019, lower than the suburb’s median unit price of $671,653.
But in April, another one-bedroom unit with 84 square meters of space sold for $535,000, even though the suburb’s five-year median unit price has risen 8.7 per cent to $730,012.
In March 2024, a three-bedroom house in Blacktown on the same block sold for $967,000, or slightly below the suburb’s median of $970,030.
That meant middle and middle income earners who bought the house rather than the unit benefited from rising house prices in 2021 after the Reserve Bank cut interest rates to a record low of 0 .1 percent.
Blacktown homes continued to make strong capital gains in 2023 as immigration hit new record highs, but the value of one-bedroom units in Waitara has barely changed despite Australia suffering a rental crisis.
Sydney no longer has any suburbs with a median price below $600,000 and Tregear, near Mount Druitt, has a median price of $688,442.
The Central Coast, an hour north of Sydney, has seen a big rise in house prices, with Woy Woy’s midpoint rising 54.5 per cent in five years, to $948,550 from $613,971.
But there are still outer suburbs of Melbourne and Brisbane that are still affordable for someone with an average full-time salary of $98,218 who can borrow $511,500 to buy a home valued at $639,375, according to RateCity calculations.
Frankston North in Port Phillip Bay has a median house price of $597,429, while Deception Bay in the Moreton Bay area has a median of $644,241.
The median home price in Deception Bay was just $405,532 in March 2019, but has since increased by 58.9 per cent.
In September 2019, a house in Wynnum, a coastal suburb 25km east of Brisbane city centre, sold for $506,000, when the median price was $659,488.
But since then, the median home price in Wynnum has increased 75.7 percent to $1.159 million.
During that time, the median house price in Redcliffe has soared 78.1 per cent to $808,433, an increase of $453,871, in the Moreton Bay area.
Frankston North, however, has seen more moderate growth of 33.3 per cent, up from $448,142 five years ago, and house prices in Melbourne grew at a slower pace than those in Sydney and Brisbane.
But Conisbee said the fact that more people could work from home several days a week made places near the water a good investment in this part of Melbourne.
In April, a one-bedroom unit in Waitara with 84 square meters of space sold for $535,000.
“Those areas are quite far from the city, but Frankston has good public transportation into the city, which makes it more desirable,” he said.
‘Very close to the Mornington Peninsula, close to the beach.
“We know, over the long term, that people have increasingly moved to beachside suburbs; that trend has been going on for the last two decades.”
The popularity of beachside living means that smaller apartments are likely to increase in value if they are close to the ocean.
Manly’s median unit price over the past year rose 12.4 per cent to $1.778 million, which is out of reach for someone earning less than $273,000.
“It’s not necessarily the case that every suburb always sees houses doing better than apartments,” he said.