Consumer property portal onthehouse.com.au has revealed new data that indicates Sydney residential property is at its most affordable level since August 2009.
The portal showed that owners are paying off their mortgages at a median rate of 45.36% of their after-tax income for houses, and 32.71% for units.
The company’s affordability indicator is based on the proportion of income the average household will need to use to make mortgage payments on properties in their suburb.
Onthehouse founder Michael Fredericks said that historically low interest rates were a factor in the improved affordability.
“The lowering of the cash rate to 2.75% by the RBA and the relatively static levels of property prices is helping home owners and increasing affordability for those wanting to get into the market,” he said.
The data has shown that units remain substantially more affordable for Sydney residents and that Paddington, Alexandria and Mosman remain the inner city’s most affordable suburbs.
Blair Athol, Minto and Leumeah are Sydney’s most affordable suburbs overall, with households paying 29.65%, 27.58% and 28.07% respectively of their after-tax income on home loans.
In contrast, high prices compared to median income levels were apparent in South Coogee, Bellevue Hill and Vaucluse.
“The data currently highlights that mortgage payments in Sydney’s least affordable suburbs are five times higher than the 35-40% of income range we consider acceptable to the average homeowner,” Fredericks said.
He added that people wishing to buy in these areas will need to earn well over the suburb’s median income or have access to additional funds.
“When looking at affordability it is important to measure on a local basis, and our data is showing that certain suburbs represent far higher value for households than others. If you are looking to take advantage of higher affordability in the current market, remember that not all areas are equal and doing your homework is essential when deciding on what property to buy.”
Sydney’s most affordable suburbs (houses and units):
1. Blair Athol (Houses)
Median value: $415,000
Weekly income after tax: $1,704
Weekly loan payment (approx.): $466
%After-tax income spent on loan payment: 27.35%
2. Minto (Units)
Median value: $233,500
Weekly income after tax: $950
Weekly loan payment (approx.): $262
%After-tax income spent on loan payment: 27.58%
3. Leumeah (Units)
Median value: $236,000
Weekly income after tax: $944
Weekly loan payment (approx.): $265
%After-tax income spent on loan payment: 28.07%
4. Jamisontown (Units)
Median value: $253,500
Weekly income after tax: $1,013
Weekly mortgage payment (approx.) $285
%After-tax income spent on loan payment: 28.09%
5. Werrington Downs (Houses)
Median value: $368,000
Weekly income after tax: $1,423
Weekly income spent on loan payment (approx.): $413
%After-tax income spent on loan payment: 29.03%
6. Raby (Houses)
Median value: $353,500
Weekly income after tax: $1,360
Weekly income spent on loan payment (approx.): $397
%After-tax income spent on loan payment: 29.17%
7. Quakers Hill (Units)
Median value: $376,000
Weekly income after tax: $1,443
Weekly income spent on loan payment (approx.): $422
%After-tax income spent on loan payment: 29.26%
8. Ingleburn (Units)
Median value: $263,000
Weekly income after tax: $998
Weekly income spent on loan payment (approx.): $295
%After-tax income spent on loan payment: 29.58%
9. Paddington (Units)
Median value: $499,000
Weekly income after tax: $1,889
Weekly income spent on loan payment (approx.): $560
%After-tax income spent on loan payment: 29.65%
10. Werrington County (Houses)
Median value: $358,000
Weekly income after tax: $1,324
Weekly income spent on loan payment (approx.): $402
%After-tax income spent on loan payment: 30.35%
Source: onthehouse.com.au / Residex
