Melbourne property is so much cheaper than Sydney's, families relocate to save millions

After a five-year stay in Ireland, Abbey Smith returned to Sydney with her partner and their two children to buy a home and settle down, but what she found astounded her.

Prices of houses in Sydney’s Sutherland Shire in the south, where the family decided to rent, had skyrocketed by nearly 50 per cent, on Domain data, and units by over 26 per cent in the time she’d been away. Living even an hour’s drive from the Sydney CBD suddenly seemed unaffordable.

“We were looking for a townhouse, but even a property that was quite old was $1.4 million to $1.5 million,” Smith, 38, said. “Maybe we were naive, but it was hard to believe that prices had risen so much.

“And then, on top of that, you had strata fees of around $1500 a quarter … it was incredible. We soon realised that if we wanted to buy a home, we’d have to live somewhere else.”

As a result, Smith, her partner John Wrenn, 45, and their son Lugh, 3, and daughter Ella, 2, decided to move to Melbourne instead, where median house prices are, on the latest Domain figures, 37 per cent lower and units 29 per cent less.

They didn’t realise it at the time, but they have joined a veritable flood of Sydneysiders shifting south to take advantage of the greater affordability of the Melbourne property market.

The median price of Melbourne houses is now $1,039,460, according to Domain, compared to $1,645,444 for a house in Sydney. Units are similarly much cheaper in the south, with a median of $577,405 compared to Sydney’s $812,863.

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1/17 McComas Street, Reservoir VIC 3073

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The price differential is often quoted as one of the main reasons so many Sydneysiders are upping sticks and heading south.

ABS research has found that Victoria had one of the highest population growth rates in the country at 2.7 per cent last year. It also experienced the largest absolute increase in population, with the addition of 184,000 people.

“The number of people coming from Sydney to Melbourne is ever-increasing,” says Jacob Caine, the president of the Real Estate Institute of Victoria. “It’s about prices and a lower cost of living here, but it’s also about amenity and lifestyle.

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412/469-481 High Street, Northcote VIC 3070

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“Sydney is stunningly beautiful, but Melbourne self-identifies as the food and cultural capital, and evidence supports that, with an incredibly diverse array of cuisines and cultural experiences. We’re, in addition, well-known as the sporting capital of Australia.”

Smith and Wrenn would agree. They ended up buying a townhouse in Pascoe Vale, a 20-minute drive north-west of the city centre, for $945,000, and with an annual strata fee of $800 – a thumping 7.5 times less than they’d be paying in the Emerald City.

“We’ve been here six weeks now, and we absolutely love it,” said Abbey, who’s found a new job in the southern capital in talent and acquisitions, while Wrenn has adapted his work as a director of operations in the pharmaceutical industry to their new location.

“We were quite nervous about the move, I’m not going to lie, but I thought it would be a lot harder to transition than it has. There are lots of employment opportunities here, we’ve got both children into daycare, and even the cost of living feels a bit less. I miss the beaches of Sydney and probably I’ll miss the winter sun, but everyone’s so friendly here, there’s so much going on and a great vibe.”

Buyers’ agent Emily Wallace, the founder of Wallace Advocates, helped the family plan and make their move. She’s constantly fielding inquiries from people who want to make a similar shift and usually advises people to rent first to check they’ll be happy.

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3 Woods Street, Ascot Vale VIC 3032

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120 North Road, Reservoir VIC 3073

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“These moves are heavily driven by the relative affordability of Melbourne prices,” she said. “You can generally afford to buy something pretty decent within 10km of the city centre in Melbourne, and we think that more and more people will join this trend.

“We get a lot of feedback that Melbourne people aren’t so rushed and have time to say hello and there’s a real community feel to a lot of the suburbs. There’s also always something happening in Melbourne with the arts or shows or music or AFL. And everything is so accessible and affordable.”