My boyfriend and I are trying to buy a place in Sydney, and I use the word ‘trying’ deliberately because we definitely aren’t succeeding.
The house we wanted in Redfern that resembled somewhere dingy a kidnap victim would be held in a horror movie sold for $1.45 million.
I hate to sound dramatic, but I’d say all hope is lost.
You’ve probably heard that house prices are decreasing. Wrong time to be a renter, the right time to buyer.
Well, I’d beg to differ.
Inflation is at more than 7 per cent and wage growth is barely above 3 per cent.
It is costing more to live, but our pay packets aren’t getting that much bulkier.
Data from CoreLogic will tell you that housing prices are down across all capital cities in Australia.
Sydney’s falling the fastest, with prices dropping 13.9 per cent, but you only have to be trying to buy to realise it is still impossible.
Things need to fall about 30 per cent before we have a chance of buying something that doesn’t come with a strange smell.
Also, dare I mention the fact that according to Finder, the average home in Australia in 1984 cost 3.3 times the average annual income, but it’s now a whopping 10 times what the average person earns a year?
Young people are not getting the same go their parents got.
Douglas Driscoll, CEO of Starr Partners, has been in the industry for decades, and he said it was still all but impossible for young people at the moment.
“If you look at wage growth versus property prices, how the hell are young people doing it without help?” he asked.
“Are they robbing a bank?”
“[And] the issue is that I think property prices will continue to drop, but I’d say interest rates will also rise. So, if you waited, you’d pay less for the property but end up paying more monthly in repayments.”
And new data from Finder shows that despite falling property prices, home ownership remains a distant dream for many young Aussies.
Finder’s Consumer Sentiment Tracker shows more than a third of non-homeowners believe they will never be able to afford a home, as of this month.
That’s a substantial increase from 21 per cent in February 2021.
Among Gen Z non-homeowners, the percentage who feel they will never be able to afford a property has increased from 4 per cent in 2021 to 14 per cent in 2023. For Millennials it has grown from 16 per cent to a whopping 37 per cent.
And according to Finder’s First Home Buyer Report 2022, more than a third of first home buyers end up exceeding their budget, with 8 per cent paying more than $100,000 over their budget and a further 8 per cent forking out between $50,000 and $100,000 over.
Just 20 per cent managed to buy below their intended budget.
“It’s sad but certainly understandable to see the growing number of young Aussies in particular who have decided that owning a home may not be a realistic possibility,” Finder home loans expert Richard Whitten said.
“Property prices rose significantly in 2020-21, and even with prices on a fairly rapid decline now the average first homebuyer is still in a very tricky spot. They’re looking at borrowing much more than in, say, 2019, and with higher interest rates too. They’re borrowing more and paying more interest.
“Buying a home in Sydney for many people is now something that requires an extraordinary amount of planning, research and sacrifice. People are looking at stretching their finances with huge loans, working more, and moving further away from family and friends to distant, cheaper suburbs.”
He said the long-term implications are that Sydney is “increasingly becoming a city divided” between those who bought a home and those who haven’t yet, between established homeowners and permanent renters and between people in inner-city suburbs and people pushed to the outer edges, facing longer commutes and less access to the beaches and amenities that make Sydney so desirable in the first place.
See? We really are doomed – and I’m not being dramatic.
My boyfriend and I have a sizeable deposit thanks to us both losing our dads.
Yes, the price of home ownership in Sydney comes with having no one to call on Father’s Day.
We also both work full-time, and we live normally.
We don’t pop bottles of Moet. We pop bottles of delicious wine from Aldi.
Even with help, our deposit is moderate, and we’d be looking at a hefty mortgage.
We are realistic about what we can afford, so I was hopeful when I saw that two-bedroom house in Redfern.
It was small, unrenovated and would need plenty of love.
My boyfriend and I joke that if we see anything for sale that looks nice, it’s an immediate no.
The worse it looks, the better chance we have of being able to buy it.
I had high hopes for the Redfern place – it was just horrible enough that it could work.
And when we inspected it, I was thrilled to see it was even worse in person.
I’m still not one hundred per cent sure what the floor was made out of. It wasn’t quite a carpet, nor could I tell you it was tiled. Someone call the lady from Murder She Wrote. I have a mystery for her!
Highlights included fading and peeling paint jobs, an ancient, barely functioning kitchen that couldn’t fit a fridge, a shower my boyfriend was too tall for and an infestation of pigeons squawking on the roof, because the old owners used to feed them daily.
It was humble and across the road from the housing commission – this doesn’t bother me, but don’t they say location is everything? We aren’t exactly looking at beachside properties.
I thought maybe we’d be able to get it for a decent price, a cool $1 million. Plus, I’d seen a few renovated terraces in the area fetch around $1.4 million.
So, I was hoping an unrenovated two bedroom place in a less appealing street might be affordable for us.
Wrong.
I know this is the part where people tell us we should look further afield. But I refuse to compromise on the area. I grew up in this area as a kid, and why should I be priced out of this area as an adult? That doesn’t seem right.
I love it here, and currently rent in the suburb.
I walk to work, he has a ten-minute commute. We love the culture and cafes, and our dog Frank has made lifelong friends at the dog park.
Young people shouldn’t be pushed out of buying in the inner city. This is the time in my life where I’m going to enjoy the benefits the most.
I love Redfern because it’s an inner-city suburb without being wanky, and it ticks every lifestyle need. Including being near my boyfriend’s mum and good schools for the future.
Only problem? Well, there’s 1.45 million problems.
