Where you can buy a house in Sydney without the bank of mum and dad

A high-income couple would have to move an average of 43 kilometres away from the Sydney CBD to afford to buy a house without the help of the bank of mum and dad, new analysis shows.

A couple earning $125,021 each would need to look to the Central Coast, Penrith, Liverpool and Campbelltown to buy a house, according to CoreLogic and Canstar data.

However, they can get closer to the CBD if they compromise with a unit, in areas such as Edgecliff, Parramatta and Sutherland.

The modelling assumes the couple has a combined budget of $1,553,750. It also considered buying options for workers on a low annual gross income of $75,013 and an average income of $100,017 based on ABS average weekly earnings data. It then estimates borrowing capacity and a standard deposit, comparing it to median home values for each suburb.

“There are still areas of Sydney that dual high-income couples can’t break in to if they’re relying on just their income and a 20 per cent deposit,” CoreLogic head of Australian research Eliza Owen said.

Owen said a dual high-income couple could only afford around half of the house market in Greater Sydney.

“It’s a no-brainer for areas like Vaucluse, but it’s more concerning when you see it in areas such as the Hills district, the north-west and inner west. They can only buy into 54 per cent of the house markets.”

High-income singles with an estimated budget of $701,250 looking for a unit would need to turn to the Central Coast or suburbs such as Mount Druitt, St Marys, Penrith, Fairfield West and Liverpool.

However, it’s a grim picture for houses with only one suburb making the cut: San Remo on the northern Central Coast.

A couple with one low-income earner and one average-income earner with an estimated budget of $1,023,750 can afford a unit on the Central Coast and in suburbs such as Strathfield, Homebush and Roselands, or a house in Penrith, Jamistown, Liverpool and Campbelltown.

Demographer Simon Kuestenmacher said we’re not just seeing affordability issues but also a clear separation of households.

“It’s an absolute catastrophe for social cohesion. Society used to look like a bell curve, and now it’s the letter U. Those with low incomes live on the outskirts of town, have a longer commute to work and spend less time with family,” he said.

Canstar data insights director Sally Tindall said affordability has made some buyers readjust their idea of The Great Australian Dream.

“A patch of grass used to be the must-have, but it’s no longer an essential for some first-home buyers. They have to balance their needs, wants and budget, and readjust their expectations to get on the property ladder,” she said.

MortgageWorks director Anthony Roddy said some of his clients have considered a career change to increase their chances of purchasing in desired suburbs, but the ones without cash gifts tend to be more motivated.

“Around 20 to 30 per cent don’t have cash gifts, but I find they’re willing to make bigger sacrifices to get on the ladder. They may purchase a one-bedroom unit with the view to move on in three to five years’ time,” he said.

Roddy said some clients buy into suburbs such as Meadowbank, Rhodes or Parramatta that have their own CBD, with the commute to the city now a weekend activity.

“They’re only five kilometres away from these new CBDs so the idea of travelling to the city up to five days a week has been flipped on its head,” he said.

$850,000

15 Richardson Road, San Remo NSW 2262

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Finance Craft mortgage broker Shane Howley said units are on track to become the only affordable option for first-home buyers.

“People are now forced to look at units over houses. It’s no longer a choice, particularly when it comes to buyers wanting a suburb that suits their lifestyle or in proximity to where they work,” he said.

Director of LJ Hooker Terrigal Matthew Farrugia has sold to first-home buyers who have made the move to the Central Coast.

“It’s cheaper, and you get more bang for your buck. For around $1.5 million, you can get a four or five-bedroom home with a pool,” he said. Terrigal’s median house price rose 7.1 per cent to $1.5 million in the year to September on Domain data.

Farrugia said it’s a “no-brainer” when first-home buyers consider what the typical rent is in Sydney and compare it to a mortgage on the coast.

“There aren’t a significant number of first-home buyers spending $1.5 million, but when you consider they’re paying up to $1200 per week in rent in Sydney, they could match that for a mortgage on the coast,” he said.