Sydney’s last suburbs affordable on salary under $100k

Skyrocketing prices over recent years and higher interest rates have meant there are now only 14 Sydney suburbs where someone earning less than $100,000 a year can afford to buy a typical apartment.

That’s according to new mortgage and price analysis which measured the salary required to buy a home at current median suburb prices without going into mortgage stress.

The Finder.com.au analysis assumed the buyer had a 20 per cent deposit and paid the average loan rate being charged by banks for 30-year mortgages – currently 6.23 per cent, according to the ABS.

It also assumed the buyer avoided spending more than 30 per cent of their pre-tax income on repayments – buyers spending more than this are regarded as in mortgage stress, spending a disproportionate amount of their money on debt repayments.

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Mt Druitt apartments are still affordable for those earning less than $100k a year.

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Home seekers needed a household income of nearly $280,000 a year to afford a house at the current Sydney median price of about $1.44m, the analysis showed.

Those buying at the Sydney median unit price of about $850,000 needed to earn $160,000 a year to comfortably afford the repayments.

Various sources place Sydney’s median household income in the range of about $120,000-$160,000 a year.

Areas where the loan repayments on a median priced unit were still affordable for those earning less than $100,000 included western suburbs Merrylands, Harris Park and Guildford.

Apartments in Liverpool are among the cheapest in Sydney. Picture: Sam Ruttyn

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There was also a cluster of affordable suburbs for sub-$100,000 earners in the inner southwest, including Lakemba and Wiley Park.

Other more affordable suburbs were on Sydney’s outer ring, including Warwick Farm, Mount Druitt, Leumeah, Carramar and Cabramatta.

The largest market accessible for those earning less than $100,000 a year – but only barely – was Liverpool in the southwest, where the median unit price was $490,000.

Monthly repayments for someone buying a median priced Liverpool unit with a 20 per cent deposit averaged about $2400, Finder’s modelling showed.

This was considered affordable for someone earning $99,000 annually.

Finder.com.au personal finance specialist Taylor Blackburn.

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Merrylands and neighbouring suburb Merrylands West also had median unit prices of $490,000.

In Leumeah, located in the outer southwest, a salary of $91,527 was enough to secure a median priced home.

In Guildford, a growing suburb in the Parramatta region, buying a unit at the median price demanded $93,561 to cover the monthly repayment of $2,261.

Further west, Warwick Farm ($445,000 median price) and Fairfield ($440,000) round out the affordable areas, where buyers earning just under $90,000 could get a foothold in the market.

These suburbs, known for their convenient transport links, represented a sweet spot for first-time buyers looking to make a step into homeownership.

The property market has been softening since spring.

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Finder.com.au personal finance specialist Taylor Blackburn said home prices were beginning to exceed the level most people could pay.

“If you aren’t lucky enough to have the bank of mum and dad on your side – or significant savings to begin with – home ownership is moving more and more out of reach,” he said.

“The money required to purchase a home in every capital city is well above the average salary and in NSW, nearly three times the average yearly wage.”

SUBURBS AFFORDABLE FOR EARNERS ON LESS THAN $100K A YEAR