If you’re not earning a six-figure income, you’re unlikely to afford Sydney’s run away home prices. That’s the harsh reality facing many potential homebuyers in the city as home prices continue to surge.
With the current median house price of $873,786 according to Domain, you would need to earn around $105,000 a year to afford a home in this city. That’s assuming you’ve saved the required 20% deposit of $174,757, you have no dependents, you have no other debts whatsoever and you’re buying it to live in.
For this you would have to borrow $698,000 mortgage which means you’d spend $4,087 a month just servicing your loan. That’s on top of your living expenses. This is based on a 5% interest rate and using the Your Mortgage calculator
The unit market may offer a cheaper alternative at the current median price of $597,668. Although even at this level, you still need to earn $75,000 a year to be considered for a loan. For a $478,134 mortgage at 5% interest rate, you’re looking to spend around $2,962 a month just on loan repayments.
In case you’re hoping for prices to fall in the near to medium term, sorry to burst your bubble, but there are no signs of this happening if the latest report from Domain is an indication.
According to Andrew Wilson, senior economist with Domain, prices are set to grow another 7-10% over 2015. Assuming a 10% growth, you could be looking at a median house price of $961,116 in Sydney by the same time next year.
“Thanks to its status as the strongest capital city economy with high migration levels, a chronic shortage of housing and heady levels of confidence from buyers and sellers, Sydney remains the dominant force amongst the capital cities,” said Wilson.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
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