Sydney homebuyers face painful 33-year wait

Home buyers have been told to brace for decades of financial pain, with the average purchaser in some Sydney suburbs required to wait until the year 2059 to finally be better off than renters each month.

New rental price forecasts have revealed the “crossover date” between monthly mortgage repayments and rents, where repaying a mortgage finally becomes cheaper than paying market rent.

The PropTrack revealed that a typical Sydney buyer at today’s prices will have to wait 13 years – until 2039 – for market rents to finally become more expensive than their repayments, at which point owning a home becomes cheaper than renting.

This constituted nearly half the length of a typical 30-year mortgage.

Owners in Sydney’s Cremorne Point, where this home sold for $3.12m, must wait until 2059 to be better off than renting.

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PropTrack’s forecasts assumed homebuyers had purchased at the median price used a 20 per cent deposit and paid a typical interest rate, currently 5.75 per cent.

The wait was longest in some of Sydney’s high-price, waterfront suburbs, with buyers in Kurraba Point, Hunters Hill and Cremorne Point having to wait until the 2050s for homeownership to finally deliver a cheaper lifestyle than renting.

On the flip side, there were two suburbs – Vineyard and Werrington – where the crossover date for a buyer was as early as 2030.

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Realestate.com.au economist Anne Flaherty

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PropTrack economist Anne Flaherty said the data showcased that there was “a real mix of areas across Greater Sydney” where mortgage payers would be better off sooner.

“It’s not just a particular area or price point,” she said.

“We’re seeing a lot of different suburbs where that time taken is not going to be that long.”

While the projection assumes a 5.75 per cent interest rate, Ms Flaherty said rate fluctuations have a ripple effect on the crossover date for owners.

“When interest rates rise higher, it does reduce what people can borrow and it does increase your monthly repayments,”

“In terms of the time it’ll take for the rents to hit the repayments … it would be longer.”

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Tom and Simone Mainprize with their daughter and dog. Picture: Supplied

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Sydney couple Tom and Simone Mainprize were spending around $5,000 a month on rent at their apartment in Waterloo, before buying their townhouse in the Sutherland Shire for around $1.5m.

While they now spend around $6,000 a month on mortgage repayments, Ms Mainprize said it was “a huge relief” to get a foot in on the property ladder.

“It’s something that feels like you’re kind of investing in yourself, but also for our future,” she said.

“We know it’s going to continue to set up not only us and our family but hopefully future generations to come.”

With their eighteen-month-old daughter and dog Sonny, Ms Mainprize said it was “really evident” that they needed more space.

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In Vineyard, where this home recently sold for $1.5m in February, a buyer would only have to wait until 2030 reap the rewards of ownership

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They bought their three-bedroom home in Sylvania through Mortgage Choice broker Richard Brown, who said owning a home was “more than just a financial decision”.

“They’ve got a young, small family, so they’re at the point in the life that they want to start to put down roots,” he said.

“You want to find a school, daycare, a bit of a community in which to bring a family up – you can’t put a price on that.”

Mr Brown added that while buyers spent more in the short term than renters, owners were building equity on their property.

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SYDNEY SUBURBS WHERE RENTS EXCEED MORTGAGE REPAYMENTS SOONEST (by crossover month)

SYDNEY SUBURBS WHERE RENTS EXCEED MORTGAGE REPAYMENTS LATEST (by crossover month)

Source: PropTrack.