Disillusioned Sydney first homebuyers are increasingly opting for investment properties in Melbourne or Brisbane as the Harbour City braces for another whirlwind year of price rises.
City property prices grew an average 6 per cent in the past three months alone and are projected to increase another 10 per cent over 2020 but many would-be first homebuyers claim the booming prices forced them to reconsider their property goals.
This contingent of buyers were more likely to consider “rentvesting” – buying an investment property while continuing to rent – with many arguing they will get better value in other capitals.
A median priced Sydney house is about $200,000 pricier than one in Melbourne, while the typical Brisbane house is $400,000 cheaper, CoreLogic data showed.
Research from developer Mirvac and Property Investment Professionals of Australia revealed NSW buyers were the least likely to be seeking a home of their own and were the most frequent investors.
Nearly half the investors surveyed were planning to buy interstate and more than 60 per cent said they would consider rentvesting.
PIPA chairman Peter Koulizos said buyers were recognising there were a “myriad investment opportunities around the country” not just “in their backyard”.
Sydney resident Jake Geary is fresh off purchasing an investment property in Brisbane and said it made more sense considering the better value for money on offer up north.
“I would have loved to own something in Sydney but it would mean scraping by on two-minute noodles to make the repayments,” Mr Geary said.
Another benefit of purchasing in Queensland were the lower property taxes and there was an opportunity to buy multiple homes for less than the price of a single Sydney dwelling, Mr Geary said.
“I own three properties in Queensland. I’d never get that in Sydney,” he said.
But it’s not just higher prices driving buyers to other capitals – a major housing shortage is making property listings harder to come by.
SQM Research showed there were about 30 per cent fewer homes advertised for sale last month compared to December 2018 and it was estimated the unprecedented bushfire season would discourage some homeowners from launching new sales campaigns in the immediate future.
Penrith couple Megan Andrews and Jeremy Craig said they decided to purchase investment properties in Queensland after getting frustrated with the amount of time it was taking to save for the lofty deposit needed for a Sydney home.
“We worried we’d never get there,” Ms Andrews said, adding they realised Queensland would be better once they learnt how much further their money could go. They now own three properties with two rent earning dwellings on each.