Interactive calculator: How much you need to borrow to buy in each Sydney suburb

A single buyer on the average income would need to ask the bank of mum and dad for a $900,000 gift to afford the average Sydney house, or $300,000 for a unit, even after securing a loan and saving a standard deposit.

CoreLogic and Canstar data shows there were no Sydney suburbs where an average income earner could afford to buy a median house without extra cash to top up their loan.

CoreLogic head of Australian research Eliza Owen said there’s a significant gap between income, savings and purchase prices.

“Sydney’s house market ranges from literally no house market being affordable for low-income singles, but even for high-income, dual-income households, only 54 per cent of markets are accessible,” she said.

Owen said buyers will leave Sydney in favour of regional NSW such as the Central Coast, Newcastle, the Hunter Valley, Southern Highlands or Shoalhaven, however, this in itself is not the answer.

“That spillover of demand creates a rising tide and affordability challenges for people living in those areas for longer periods of time,” she said. “There’s this cascading issue of affordability where those in regional centres don’t have an affordable market to go to next.”

Owen said the Great Australian Dream of owning a home won’t be accessible for all, with some having to rent forever. For some, apartment living will be the new normal for even high-income Sydney households.

“For a high-income, dual-income household, 94 per cent of unit markets in Sydney are within their borrowing capacity,” she said.

“The vast majority of unit markets are also accessible for dual average-income households. The low-income single households don’t have any affordable unit markets in Sydney based on their current borrowing capacity.”

The data assumes an average annual gross income of $100,017, based on ABS average weekly earnings data. It then estimates borrowing capacity, from Canstar research, and compares it to median home values for each suburb, on CoreLogic data.

The shortfall for a single average-income earner hoping for Sydney’s median house was $948,142. For units, the gap was $335,300.

A dual average-income couple would still be short $271,892 for a house.

Canstar data insights director Sally Tindall said that while the bank of mum and dad has become increasingly popular in a climate of higher interest rates, not everyone has that luxury.

“It’s cold comfort for anyone whose family isn’t in a position to help financially,” she said.

“As a result, the gap between those making their way around the real-life Monopoly board and those that can’t get off Go continues to increase.”

The Australia Institute senior economist Matt Grudnoff said without intergenerational wealth or a high-paid job, first home hopefuls will be locked out of home ownership.

“It’s unreachable if you don’t have a job that can put you into higher-income brackets. That’s why we continuously see the age of first-home buyers going up,” he said.

Grudnoff said home ownership later in life may result in superannuation being used to pay off a mortgage.

MortgageWorks director Anthony Roddy said cash gifts from parents range from $50,000 to beyond $1 million.

In one instance, a client of Roddy’s received $2 million from a parent over a five-year period. “A couple had a $1 million gift from one of their parents towards their first home and about four years later they came back to me with a small mortgage on their townhouse. They were selling and received another $1 million gift to upsize.”

Consultant Michelle Lomas, 39, has twice borrowed from her parents to purchase property. After repaying their loan that assisted with her first home purchase of an apartment about five years ago, she has this year gratefully accepted another loan to upgrade to a three-bedroom house for her growing family in Sydney’s eastern suburbs.

Buying investment properties in Queensland and Western Australia in the interim was not enough to build enough equity for a deposit. She and her husband moved overseas for a stint and came back to Sydney, but were hesitant to move away from their networks to a far-flung suburb to buy a family home.

Michelle Lomas bought a home in Sydney with help from the bank of mum and dad.Credit: Janie Barrett

They planned to rent a home while investing elsewhere. Then her parents offered to help again.

“Sydney was just an impossible dream. We didn’t even consider it because we just figured we couldn’t afford where we wanted to live in Sydney,” she said.

“Without mum and dad we wouldn’t be here, we’d still be renting.”

Watching friends also borrow from family – and sometimes seeing this go wrong when parties have not been clear about repayment terms – inspired her to set up money lending platform Chipkie, which allows families to set up loan records and contracts for peace of mind.

She has seen users of the platform lend amounts as high as half a million dollars and more.