Cotality’s (formerly CoreLogic) latest housing affordability report showed that the cost of purchasing and renting a home in Sydney was the worst on record at the end of 2024, as well as the highest in the nation.
As illustrated above, Sydney’s dwelling value-to-income rate was 9.8 at the end of 2024. It required a typical purchaser of a new home in Sydney to spend 62.1% of their income on mortgage payments and the typical Sydney tenant to spend 33.1% of their income on rent. It also took a typical Sydney buyer 13.1 years to save a 20% deposit.
Therefore, on virtually every measure, Sydney’s housing affordability is disastrous for new buyers and tenants.
A new study by PropTrack shows that Sydney home prices are four times higher today than in 1980, adjusted for inflation:
Even buyers that purchased in Sydney in 2010 are paying 68% less than today’s buyers, adjusting for inflation.
“There are a lot of factors”, REA Group economist Eleanor Creagh said. “The Australian population has grown by about 10 million since the 1980s and most of that growth has been concentrated in city markets where the supply of new housing has been constrained”.
“Every generation has its own unique struggles but on the whole today’s buyers are navigating a fundamentally different landscape with structural housing barriers baby boomers did not have”, Creagh said.
“The deposit and stamp duty burden is much higher, affordability is more stretched and prices have vastly outpaced wage growth”.
PropTrack economist Angus Moore added that “the deposit hurdle is just unequivocally harder than it was four or five decades ago, and that has manifested in home ownership rates which have fallen over those years”.
Sydney had genuinely cheap housing in 1980, as shown below:
According to Realestate.com.au, the current median house prices for the above suburbs are as follows:
- Oxley Park: $980,000
- Blackett: $780,000
- Illawong: $1,892,500
- Lethbridge Park: $787,500
- Menai: $1,600,000
- Mount Druitt: $960,000
The level of price inflation is staggering.
To exacerbate the situation, Sydney house asking rents have surged by $255 (49%) since Q4 2024, while unit asking rents have increased by $210 (42%) during the same period.
The surge in rents has obviously made it more difficult for prospective Sydney home buyers to save a deposit.
It is a bleak situation if you are a young Sydneysider hoping to move out of home.
