Young Australians on a tight budget who buy a small apartment in a more expensive postcode instead of a house in a less trendy area are less likely to get rich.
Before the pandemic, units in Waitara on Sydney’s north shore and homes in Blacktown in the city’s far west both sold for less than $540,000 in 2019.
But five years later, the average house price in Blacktown is $970,000, with very few houses selling for less than $900,000, while one-bedroom apartments in Waitara are only selling for $535,000, despite being next to the more expensive Wahroonga.
In five years, the average house price in Blacktown has risen by 49.4 per cent, while one-bedroom apartments in Waitara are selling for less than in 2019.
In 2019, before the pandemic, units in Waitara on Sydney’s North Shore and homes in Blacktown in the city’s far west both sold for less than $540,000 (including this house which sold for $535,000 in February 2019)
Young Australians on a tight budget who buy a small apartment in a more expensive postcode instead of a house in a less trendy neighborhood are less likely to become wealthy (pictured is an apartment that sold for $539,000 in October 2019)
Ray White chief economist Nerida Conisbee said one-bedroom apartments don’t make much sense in a family-friendly suburb like Waitara, which is close to several schools.
“If you’re building a lot of one-bedroom apartments in a family neighborhood, that probably makes less sense than building apartments that are slightly larger,” she told Daily Mail Australia.
But Blacktown house prices also soared after the construction of a new Metro West rail line in western Sydney, in a suburb that is also close to the M7 and M4 highways.
“A lot of it has to do with investment in western Sydney in terms of infrastructure and roads,” Ms Conisbee said.
“Sydney is growing, so suburbs like Blacktown, five, 10 years ago, might have been considered a bit far out of town, but Sydney has gotten bigger, from that perspective it’s starting to look a lot more attractive.”
In one comparison, a three-bedroom Blacktown house on a 556 square meter block sold for $535,000 in February 2019, which was below the suburb’s average house price of $649,450 at the time.
In March 2024, another three-bedroom house, Blacktown, in a block of the same size, sold for $967,000, or slightly below the suburban median of $970,030.
In Waitara, a one-bedroom apartment of 84 square meters sold for $539,000 in October 2019, which was below the suburb’s average unit price of $671,653.
But in April, another one-bedroom apartment of 84 square meters sold for $535,000, even though the average price per unit has risen 8.7 percent in five years to $730,012.
In March 2024, a three-bedroom house in Blacktown on a block of the same size sold for $967,000, or slightly below the suburban median of $970,030.
That meant middle-to-middle income earners who bought the house instead of the owner-occupied property benefited from rising house prices in 2021 after the Reserve Bank cut interest rates to a record low 0.1 per cent.
Houses in Blacktown continued to post strong capital gains in 2023 as immigration hit new record highs, but the value of one-bedroom apartments in Waitara has barely changed despite Australia facing a rental crisis.
Sydney no longer has any suburbs with a median price below $600,000, while Tregear near Mount Druitt has a midpoint of $688,442.
The Central Coast, an hour north of Sydney, has seen a big rise in house prices, with the midpoint of Woy Woy rising 54.5 per cent in five years, from $613,971 to $948,550.
But there are still suburbs of Melbourne and Brisbane that are still affordable for someone with an average full-time salary of $98,218, who can borrow $511,500 to buy a home worth $639,375, based on RateCity calculations.
Frankston North on Port Phillip Bay has a median house price of $597,429, while Deception Bay in the Moreton Bay area has a midpoint of $644,241.
Deception Bay’s average house price was just $405,532 in March 2019, but has risen 58.9 per cent since then.
In September 2019, a house in Wynnum, a waterfront suburb 25km from Brisbane city centre, sold for $506,000, when the average price was $659,488.
But since then, Wynnum’s median home price has risen 75.7 percent to $1.159 million.
During that time, Redcliffe’s average house price has risen 78.1 per cent to $808,433, up from $453,871 in the Moreton Bay area.
However, Frankston North saw more moderate growth of 33.3 per cent, compared to $448,142 five years ago, with house prices in Melbourne growing slower than in Sydney and Brisbane.
But Ms Conisbee said the fact that more people could work from home several days a week made places close to the water a good investment in this part of Melbourne.
In April, a one-bedroom unit in Waitara with 84 square meters of space sold for $535,000
“Those areas are quite far out of the city, but Frankston has good public transport into the city, so that makes it more desirable,” she said.
‘The proximity to the Mornington Peninsula, close to the beach.
“We know in the long term that people have increasingly moved to beachside suburbs; that trend has occurred over the past twenty years.”
The popularity of beachfront living means that smaller condos will especially increase in value if they are close to the ocean.
Manly’s average unit price has risen 12.4 per cent in the past year to $1.778 million, which is out of reach for someone earning less than $273,000.
“It’s not necessarily the case that in every suburb you always see houses doing better than apartments,” she says.