NSW real estate: the Sydney suburbs where first-time buyers are getting best bargains

New research has revealed the Sydney suburbs where first-home buyers are getting some rare success in scaling the property ladder and even snapping up bargains. See the list

They’re the suburbs where first-home buyers are getting some rare success in scaling the property ladder and even snapping up occasional bargains.

New lending figures showed there has been a surge of first-home buyer activity across pockets of Sydney’s northwest, southeast and suburbs on the outer fringes of the city.

Many of these suburbs were popular because there was a perception of more value for money and they often offered a similar lifestyle to more trendy neighbouring regions, but at lower prices.

The biggest increase in first-home buyer spending was in the suburb of West Ryde in Sydney’s northwest, according to the mortgage data from NAB. Loans issued to first-home buyers over the four months to August were triple the amount approved over the same period last year.

Aaron Kwon, with wife Summer Oh and daughter Hailey, bought a unit in The Parade in West Ryde. Picture: Sam Ruttyn

West Ryde remains one of the few suburbs within 20km of the CBD where homes are available for under $700,000, with the median unit price currently at about $680,000.

There was another considerable first-home buyer spike in the postcode that includes Matraville, Chifley, Little Bay and Malabar in the southeast, which recorded a doubling in demand.

Units and houses in these suburbs were often about $500,000 cheaper than in suburbs just to the north such as Maroubra and Coogee.

Markets where the first-time buyer increase was about 80 per cent included Bateau Bay on the Central Coast and Merrylands in the Greater Parramatta region.

These rises in activity came despite Australian Bureau of Statistics figures showing first-home buyer activity across NSW has been in free fall since the start of the year.

Sydney’s southeast, including Little Bay and Matraville, have become more popular with first-time buyers.

Lending to new buyers was at a 10-year high in March but has since dropped by 22 per cent as property prices continued to climb and incentives such as the First HomeBuilder scheme expired.

A report from Moody’s released earlier this week also revealed Sydney housing affordability was worse than at any time in the last decade.

FIRST-HOME BUYER TRENDS

NAB executive of home ownership Andy Kerr said affordability problems and lockdowns impacted the market, but first-home buyers continued to find bargains.

Increased work from home arrangements during the pandemic were stimulating first-home buyer activity in some locations, he explained.

“What we’ve seen over the last 18 months during the pandemic is a big shift in the way many Australians are working,” he said.

Bateau Bay in the Central Coast had an uplift in first-home buyer activity.

“This has fundamentally changed homebuyer options, (opening) up suburbs that haven’t been available in the past with the daily commute.”

Mr Kerr said it was now more feasible for first-home buyers to capitalise on the abundance of cheaper, newly built housing in outer-metro areas like Liverpool and the Central Coast.

Others were prepared to leave Sydney altogether. “It’s clear the sea- and tree-change continue to be incredibly popular for first-time buyers,” he said.

Realestate.com.au economist Paul Ryan said first-home buyers in Sydney generally had two options: wait many years to be able to afford buying in inner areas or buy more than 30km from the CBD.

Most were opting for the latter. “The typical first-home buyer is moving about 8km from where they live. That move tends to be further from the CBD,” Mr Ryan said.

Aaron Kwon said his family were excited about their first purchase. Picture: Sam Ruttyn

Aaron Kwon, 36, and wife Summer, 30, recently bought their first home in West Ryde and said they liked the accessibility, cheaper prices and value for money.

They bought an apartment in The Parade, a 150-unit complex of three buildings being developed by Billbergia Group, and Mr Kwon said they were excited.

“The school catchment is good, (the area) is easy to access, and the prices are not that high yet. We could see potential,” he said. “I really loved the apartment.”

Developer Billbergia was reported to have recognised West Ryde as a “hidden gem” and more than three quarters of the units it has released sold.

Buyer’s agent Michelle May said cracking the Sydney housing market was challenging, but some of the buyers who were really struggling were creating their own problems.

“Some buyers get in their own way,” she said.

Buyers Agent Michelle May. Picture: Richard Dobson

“Their expectations don’t match reality. What they want and what they can afford are too different. It’s like shopping in the Maserati showroom with a VW budget.”

Unwillingness to compromise on location and preferences often led to a common frustration, Ms May added. “They end up chasing the market. Just as they adjust to prices, the prices move again,” she said. “You should always buy quality and if you can’t afford that in any location you should look in an area where you can.”

Postcodes with biggest Annual jump in first homebuyer lending

● 2114 – including West Ryde +228%

● 2036 – including Matraville +134%

● 2160 – including Merrylands +80%

● 2261 – including Bateau Bay +79%

● 2560 – including Campbelltown +70%

● 2147 – including Seven Hills +68%

● 2170 – including Liverpool +56%

● 2200 – including Bankstown +50%

● 2077 – including Hornsby +47%

● 2153 – including Baulkham Hills +38%

Source: NAB (four months to Aug ‘21 v. same period in ‘20)