The familiar Millennial refrain of ‘I’ll never own a home’ may actually be a myth, with real estate listings for one- and two-bedroom units showing there are countless opportunities for younger Sydneysiders to get on the property ladder.
While the Australian dream of owning a house on a quarter-acre lot may be out of reach for most people in their twenties and thirties, for those prepared to embrace apartment living – and live outside of the trendy inner-west, lower north shore and eastern suburbs – there are no shortage of units hitting the market.
But renters looking to become first-time buyers need to act quickly: these affordable apartments won’t stay affordable for long, with unit prices expected to soar in the coming years along with house prices because of record-high immigration.
Here, Daily Mail Australia breaks down the pockets of Sydney where it is still possible to buy a two-bedroom unit for under $500,000 and be able to service a loan.
And for those looking at their bank accounts and wondering ‘can I afford that?’, a $500,000 property usually requires a 20 per cent deposit of about $100,000 to avoid the need for costly lenders’ mortgage insurance.
These $500k ‘hidden gem’ suburbs sit well below Sydney’s median unit price of $828,919, which is unaffordable for an average-income earner.
The familiar Millennial refrain of ‘I’ll never own a home’ may actually be a myth, with real estate listings for one- and two-bedroom units showing there are countless opportunities to get on the property ladder. (Pictured: Renters line up to view a room in Sydney’s CBD earlier this year)
Lakemba, 15km south-west of the city centre and with a train station on the T3 Bankstown line, is particularly affordable with a median apartment price of $432,958.
That is significantly less than the suburb’s mid-point house price of $1,192,437, based on CoreLogic data.
There are trains to Central Station every 10 minutes and the journey takes just 26 minutes.
A two-bedder on quiet Colin Street, including a car space, is on the market for under $410,000.
Another unit on the corner of a well-maintained complex is going for just $389,000, and other similar properties are listed for as little as $329,000 and $387,000.
But a Sydney valuer, who declined to be named for fear of reprisals, told Daily Mail Australia units in this area didn’t have good capital growth prospects, citing demographic factors.
‘It was Lakemba, I did a valuation of a two-bedroom unit – this was a couple of years ago – and the value went up around about $10,000 in about 12 to 15 years,’ he said.
‘Those areas, they just don’t increase in value because no one’s interested.’
One of two bedrooms in a Lakemba unit is on the market for under $410,000
But Riverwood, 19km south of the city centre and just a 35-minute commute to Central Station, is arguably Sydney’s best-kept secret for first-home buyers.
There are plenty of affordable units within walking distance of Riverwood railway station, which is serviced by the T8 Airport and South line.
The median unit price in the suburb is $604,697, but a cursory glance of the listings shows you can score a two-bedroom apartment for much less than that.
A two-bedroom example just 14 minutes’ walk from the station is on the market with a price guide of $450,000 to $490,000.
For those willing to spend a little more in the area, a northeast-facing top-floor corner apartment is going for just under $600,000.
The living room of a two-bed unit in Riverwood with a price guide of $450,000 to $490,000
Wiley Park, 17km south-west of the city centre, is another suburb on the Bankstown Line with units within reach of many would-be first-time buyers.
The median price for units is $451,784.
Several apartments are for sale below that figure, including a top-floor, two-bed unit just 400m from the station being offered for a negotiable $379,950.
And a single-bedder on Alice Street is listed for $369,000.
The stylish lounge room of a two-bedroom Wiley Park unit for sale with a $380k asking price
The median price for a unit in Punchbowl, 17km from the city centre, is a very affordable $475,337.
Punchbowl is another good suburb for commuters, with regular Bankstown line trains to Central station taking about half an hour.
One light-filled two-bedroom unit listed for sale has an asking price of $440,000, which includes a balcony and car space.
One of the units in this complex in Punchbowl recently hit the market with a $440,000 guide
Bankstown, 19km from the CBD or just 35 minute on the train, is another suburb where $500,000 can comfortably buy an apartment with two bedrooms.
The mid-point unit price is $507,362, with three-bedroom units going for $631,000.
One unit on Cairds Avenue with two bedrooms and a lock-up garage is on the market for $489,000 – well within the means of someone who has saved up a $100k deposit.
One of the two-bedroom apartments in this unit block is for sale with a $489,000 price tag
For those who don’t want to move west for their first home, Sydney’s Upper North Shore offers a somewhat more upmarket alternative.
But you will end up spending more for less in terms of size.
Hornsby and Waitara are home to $500,000 apartments – but for that price they are only available with one bedroom. Overall for this area, the median apartment price is north of $700,000.
Two- and three-bedroom units in Hornsby cost about $680,000 and $1,145,000 respectively. In Waitara, you’re looking at $720,000 for the average two-bedder.
The newly renovated kitchen of a one-bedroom unit in Hornsby, on Sydney’s ritzy Upper North Shore, which is on the market for $440,000
One of these two-bed units in Gosford, on the Central Coast, is being sold for under $500,000
One single-bed Hornsby unit located on Pound Road, just 400m from Hornsby Station but minus a car port, is listed for $440,000.
A similar property with a car space has a price guide of $440,000 to $480,000.
For those seeking something near the water and two bedrooms, potential buyers would have to head to the Central Coast, an hour’s drive north of Sydney, where Gosford’s median unit price is $547,817.
Unit values are expected to surge as record-high immigration worsens the housing shortage and makes homes with a backyard harder to obtain. Lakemba (pictured) is particularly affordable having a median apartment price of $432,958 in a suburb on the train line
For those wanting to live somewhere more upmarket, Hornsby (pictured) and Waitara are home to $500,000 apartments – but for that price, they are only available with one bedroom
During the pandemic, house values soared when the Reserve Bank slashed interest rates to a record-low of 0.1 per cent, but unit prices in many areas hardly moved as more Australians demanded a bigger home with space for full-time work.
But a record immigration intake is set to change that, despite the RBA cash rate being at an 11-year high of 4.1 per cent, as strong population growth worsens the rental crisis and pushes up demand for a unit in a big city.
KPMG is expecting Sydney unit values to surge in the next two years because of population growth, taking it within sight of the $1million mark, with strong growth also tipped in Melbourne and Hobart.
‘Units in Sydney, Melbourne and Hobart are likely to experience larger gains than the national average in the next two years,’ it said.
Sydney prices were tipped to climb by 4.3 per cent in the year to June 2024, rising to 8.6 per cent by mid-2025.
This would see the mid-point price of a Sydney apartment climb to $843,169 by the middle of next year, rising to $915,681 by June 2025.
CoreLogic research director Tim Lawless said middle-market homes were likely to be in demand, as national housing values recovered by the end of 2023.
‘Possibly we are starting to see renewed affordability challenges deflecting more demand towards the middle of the market where barriers to entry are lower,’ he said.
‘Housing affordability is still relatively stretched and is getting worse as home values continue to rise.’
The Reserve Bank’s 12 interest rate rises since May 2022 mean it’s harder to get a bank loan for a house, which could see more buyers opt for an apartment.
‘Housing affordability is still relatively stretched and is getting worse as home values continue to rise,’ Mr Lawless said.
‘High interest rates make it harder to qualify for credit, especially when considered alongside high cost of living pressures.’
Hobart’s median apartment price of $520,460 is more affordable following an annual fall of 6.9 per cent.
But the Tasmanian capital was expected by KPMG to see the biggest surge in unit prices, with an 8.7 per cent increase in the year to June 2024 followed by a 10 per cent annual increase by June 2025.
This would see prices surge to $575,420 by the middle of next year and to $632,962 by mid-2025.
Of Australia’s big cities, Melbourne offers better value in a city where the median unit price is $612,585.
Hobart’s median apartment price of $520,460 is more affordable following an annual fall of 6.9 per cent. But the Tasmanian capital was expected to see the biggest surge in unit prices (Sandy Bay, pictured)
For $500,000, it’s possible to buy a unit at bayside St Kilda with the suburb having a median unit price of $539,615.
KPMG is expecting Melbourne’s median unit price to climb by 3.1 per cent in the year to June 2024, rising to 7 per cent by mid-2025.
This was see Melbourne’s mid-point rise to $619,810 by the middle of next year and $663,197 by mid-2025.
South-east Queensland also offers choices on a $500,000 budget, with Brisbane having a median unit price of $539,169.
Brisbane apartment prices were expected to go backwards, falling by 0.5 per cent in the year to June 2024, which would take values back to $509,701 but rise by 3.1 per cent annually in June 2025, to $525,501.
The Gold Coast is generally dearer for apartments, but there are pockets of value with Ashmore, near Southport, having a median unit price of $491,286 in a suburb one back from the beach.
A record 454,400 migrants moved to Australia in the year to March, which included an influx of international students and skilled migrants.
For $500,000, it’s possible to buy a unit at bayside St Kilda (pictured) in Melbourne, with the suburb having a median unit price of $539,615
The Gold Coast is generally dearer for apartments but there are pockets of value with Ashmore, near Southport (pictured), having a median unit price of $491,286 in a suburb one back from the beach
KPMG’s Residential Property Market Outlook report, by economists Brendan Rynne and Brian Tran, said high immigration was likely to push up rents, feeding into unit prices.
‘Immigration looks set to add significant pressure to the housing market,’ they said.
The futures market is expecting the Reserve Bank to begin cutting interest rates in 2025 as the 12 increases, to date, since May 2022 slow down economic activity.
KPMG said this would add to demand for apartments.
‘Projected rate cuts and constrained housing supply are poised to drive consistent growth in both house and unit prices during fiscal year 2025,’ it said.
Median Australian property prices
SYDNEY: Houses, $1,381,045; Apartments, $828,919
MELBOURNE: Houses, $$933,281; Apartments, $612,585
BRISBANE: Houses, $848,680; Apartments, $539,169
ADELAIDE: Houses, $742,909; Apartments, $464,414
PERTH: Houses, $646,777; Apartments, $437,883
HOBART: Houses, $702,377; Apartments, $520,460
DARWIN: Houses, $579,142; Apartments, $382,116
CANBERRA: Houses, $956,600; Apartments, $591,952
Source: CoreLogic median house and unit prices in September 2023