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First Home Buyers: How Much Do You Really Need to Buy A Property in Sydney, Melbourne, and Brisbane?

May 11, 2022

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Better accessibility into the property market is something first home buyers have been desperate to see during this election campaign. And as the property market slowly recovers from the battering delivered by COVID, we decided to take a closer look at their chances of buying a property this year.

Are young people right to still feel despondent about their chances of buying?

We don’t think so.

Admittedly, the cost of living for the average Australian has shot up over the past few years, and that includes the cost of renting and buying property. But both political parties have offered incentives in terms of assistance schemes to help first home buyers get their foot in the door of property ownership – the Coalition, by raising the price caps for houses eligible for its Home Guarantee Scheme and the Labor Party, with their introduction of the "Help To Buy" scheme which aims to cut the cost of buying a home by 40% for 10,000 Australians each year.

But what do the incentives from our two main political parties mean in real terms for first home buyers?

Well... when you look at the bigger picture – in terms of the assistance schemes, how the predicated rate rises will affect property prices, and how much a first home buyer actually needs to find to buy a house or unit in our three main cities, the outlook is not so bleak. Despite the constant doom and gloom forecasts in the media, many buyers will be able to use the interest rate rises and the anticipated drop in the property market to their advantage.

Listing Loop has done some research into how much first home buyers need to spend to get onto the property ladder in Sydney, Melbourne and Brisbane and our results may surprise you. Obviously, the figures are based on generalisations – because properties vary enormously in terms of specification – but we think they provide a good indication of our current hotspots.

How much do I need as a first home buyer
Many buyers especially first home buyers will be able to use the drop in the property market to their advantage

Sydney - For those who can still afford to buy in Sydney, the city’s stunning landscape and lifestyle don’t disappoint

Once upon a time, the jewel in Australia’s crown was seen as one of the most desirable cities in the world, thanks to its relaxed lifestyle, beautiful beaches, and the iconic Opera House that crowns its beautiful Harbour. But the narrative around Sydney has changed over recent years because of the increasing cost of living. And that’s nowhere more apparent than in its property and rental prices.

The city is short on “good property”, and though there is an emerging oversupply of new and off-plan apartments in some suburbs – due to the city’s attempts to focus its new builds in suburbs close to train lines – unfortunately, many young people still can’t afford to live in them.

With a median unit price over the past 12 months of $800,000 and a median house price of $1,601,000, it’s hardly surprising that our young people are migrating to other, more affordable cities.

There are still some bargains to be had to the west of the city in suburbs that are slowly being gentrified, e.g., you can still buy a unit for less than $600,000 in Parramatta or Auburn, but if your dream is an ocean view, you’ll need to set your sights on suburbs like Dee Why on the northern beaches or Paddington in the eastern suburbs, where the median unit price was around $1M last year.

Melbourne - Regarded locally as the “Sporting capital of the world”, Melbourne is seen as the home of the “thinking Australian”, a city rich in culture, coffee and, erm… penguins

More importantly, it's slightly more affordable than Sydney, its long-term rival in the “best place to live in Australia” stakes, especially since property prices have skyrocketed there.

The charm of Melbourne is that it offers something a little different to the stereotypical Australian lifestyle depicted in shows like Home and Away with its European vibe, cultural diversity, and support for the arts and culture. And over the past 12 months, with a median unit price of $500,000 and a median house price of $1,101,000, it is still a bargain compared to Sydney.

Although building work fell overall by 1.6% in Australia last year, nearly a third of the homes built over the past five years have been in Victoria and the government has focused on outer suburbs like Cranbourne East, Mickleham, Tarneit, Truganina and Beaconsfield to support young families, and the Docklands and Southbank areas of Melbourne’s city centre to create affordable housing for its young professionals.

Melton and South Albion appear to be the cheapest suburbs in greater Melbourne for units, and though the entry price in trendy suburbs like Fitzroy is around $500,000, the reality is you’ll need closer to $800,000 for a 2-bedder. St Kilda is a little cheaper, but just a few kilometres out of the city, in outer eastern suburbs like Dandenong, a unit comes up for as little as $400,000.

Brisbane - With its buoyant job market, favourable climate, relaxed vibe, and evolving culture, what’s not to love about Brisbane?

We mentioned Brisbane’s appeal in our recent post about Queensland, but the obvious draw of this city is that it's conveniently nestled between the Gold and Sunshine Coasts and its lower cost of living - evidenced by its lower property prices. With a buoyant job market, a favourable climate, and the state’s legendary relaxed vibe, it is still possible to buy into the Aussie dream further north.

Units within walking distance of South Bank, such as the trendy suburb of Westend, will set you back around $700-800,000 but further out, you can still spend less than $500,000.

The city’s median unit price over the past 12 months was $416,000, its median house price was $792,000, but in Brisbane’s cheaper suburbs like Waterford West, Springwood and Browns Plains, you can still pay less than $300,000 for a unit, and in some areas in Greater Brisbane - such as Russell Island and Toogoolawah - there are houses on the market for less than $300,000.

If now is the right time for you to buy, try not to be put off by the media’s forecasts about the property market, because there are ways to protect yourself from interest rate rises. And the best way to start saving money on your new purchase is to start your property search here, WITH US, by either checking out our newest off-market listings or by downloading our app for our latest updates. Not yet a member? Sign up here today for free.

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