Cheap real estate: last 24 Sydney suburbs where you can still buy homes below $500,000

Sydney property prices remain sky high, despite the recent downturn, but there are pockets where it’s still possible to buy a home for as low as $380,000, new data shows.

They’re the last “cheap” houses in a city that’s become the world’s least affordable housing market behind only land-starved Hong Kong.

Analysis of new real estate listings has revealed Sydney still has just under 1500 properties available for sale with price tags under $500,000.

The bulk are units and apartments and only about 50 are freestanding houses.

These unusually low deals – Sydney’s median property price is about $980,000 – were mostly concentrated in a handful of suburbs spread across the west and southwest.

This included a cluster of suburbs between Lakemba and Fairfield in the southwest, with Lakemba’s $380,000 median unit price making it the cheapest suburb in Sydney.

Units available at that price were typically two-bedroom properties with about 50-100sqm of floorspace.

They included, in most cases, a single bathroom and ranged from fully-renovated homes to those requiring cosmetic upgrades.

Nearby suburbs Wiley Park, Carramar and Berala were the only other suburbs where typical unit prices were below $400,000, according to the PropTrack data.

It comes as prices across most of Sydney continue to fall in the wake of nine successive interest rate hikes since May but, critically, few of the falls have occurred in cheaper areas.

Ray White chief economist Nerida Conisbee said pricey coastal suburbs had the biggest falls in prices because fewer buyers could afford loans on the inflated sums needed to buy properties in these areas.

It’s been the opposite with cheaper suburbs: they have seen a boost in demand as buyers’ shrinking borrowing capacity forced them to move to areas they could still afford, Ms Conisbee said.

A two-bedroom unit in this block at 38 Moreton St, Lakemba recently sold for $376,000.

Agent Eli Alkassar, who has been selling homes in the St Marys and Mt Druitt area of Western Sydney – historically one of the cheapest Sydney regions – said the lower prices were attracting buyers from across the city.

“A lot of our first homebuyers are coming from areas like Greystanes or even Castle Hill because they can’t afford them anymore,” Mr Alkassar said.

It comes as CoreLogic data showed Sydney housing affordability was close to the levels recorded during 1990, when Australia was in the midst of a recession and the cash rate was at a high of 17.5 per cent.

Homebuyers are also grappling with severely diminished budgets.

A buyer who last year would have been able to borrow $500,000 for a home purchase would now only be able to get a $372,000 loan.

Apartments for sale in Liverpool typically have priced under $500,000.

Buyers who last year could get $1m mortgages can now only borrow $744,000, according to Canstar data.

Canstar analyst Steve Mickenbecker said this reduction in borrowing capacity may squeeze more home seekers to cheaper areas.

“Buyers will potentially be chasing each other down the price ladder rung by rung,” he said. “Buyers’ expectations will be dropping at all levels across the income board. The compromise for many will have to come in terms of location or housing style, standard or size.”

A study from Demographia comparing median prices and incomes across 92 global cities showed Sydney was the least affordable after Hong Kong.

The level of housing affordability in Sydney was almost twice as bad as in London and New York.

Australia as a whole had the least affordable national housing market behind Hong Kong SAR and New Zealand.