Buying in Sydney

I'm considering a move to Sydney from Manchester, and I'm curious how viable it is to buy in the area (within a reasonable commute of the centre of Sydney)?

Currently I'm a contract software engineer in the UK and in Aus I'd be permanent on a salary of 130-150K AUD - I'd be taking a cut in overall income.

I own an house (with mortgage) in the UK, ideally I would keep this and rent it out, as a financial life-line to the UK should I return.

I have a strong affinity with home ownership and don't think I could make the jump if home ownership isn't viable.

130/150K AUD seems like a decent salary, even in Sydney - so being condemned to perma-renting seems crazy, briefly looking at property prices it seems to be that way... but of course I lack local knowledge.

Any help / advice would be much appreciated.

To buy a house in Sydney you will need well over $1M.

And probably a cash deposit of $200,000.

If you have a sizeable deposit and are on a salary of $150K you should be able to get a mortgage.

If you will only have the 1 income, ie no spouse/partner with an income it will be tough going with a large loan.

Thanks for the response! I'm guessing the $1mil figure is applicable to anywhere within a reasonable commuting distance? Is that inclusive of appartments?

Sounds like it might not be feasible at all, I'd have to sell my house here for sure with the deposit requirements!

Aah well!

House in good area within a reasonable commute would be a bit of a stretch on one salary but apartment should be doable. A fair few in good places for $750k-$900k

My sis in law bought a nice small terrace house in Leichhardt (good inner west suburb, 15 mins to city) for $820K 18 months ago. Prices have risen, she'd probably need $1m now, but there were stacks of apartments when she was looking $150k or so cheaper

Might be helpful to define what you mean by a 'reasonable commute', for me that is under 30 mins on public transport which is usually about an hour door to door. The median price in Sydney is over $1m though so that probably is realistic.

Units (apartments) will be cheaper - have a look on domain.com.au

Are you sure about the salary? I worked in Perth during the boom and a salary of $130k would have been hard to achieve. You could still contract for a higher income.

Thanks for the responses.

Leichhardt looks like an awesome central location, brief search indicates I'd have to sell a my house, earn more and maybe a kidney or two!

I've been doing up to 1.5 hours each way on some of the most notorious motorways in Europe for the past year - I've vowed never to do that again if possible, it's soul destroying, the money doesn't make up for it either.

I'm guess I could easily do 1 hour each way sat on a train, anything less is a bonus.

The salary range I gave is accurate, it worries me you say even in boom times it would be hard to achieve, so who the hell is living in these $1 houses then?! It sounds like London all over again :-)

Any particular reason for Sydney? Maybe you would get a better lifestyle and similar wage in Melbourne.

Sydney is entirely down to a direct reach out from a corporation there, mixed with all the positives you hear about the place (minus cost of living).

I had looked at Brisbane last year.

My worry is that I'm going to waste the opportunity of a large corp. holding my hand along the way - maybe I should be more patient.

Have a look on domain at Sutherland Shire area. You'd get an apartment for under that, I would have thought. Cronulla is lovely (although you might be stretching it, budget-wise for an apartment overlooking the beach), as are most other areas. Some are more family-type areas with expensive houses, but there are quite a few apartment blocks in Cronulla, Caringbah, Miranda and Sutherland, with more being built in Kirrawee. Those areas are easily commutable to the city by train (assuming you are working in the city). It takes about an hour from Cronulla, the other suburbs are quicker. The train service is generally reliable. If you could stretch to Cronulla, it has a very beachy vibe, lots of good restaurants/nightlife etc.

Awesome thanks, lots of locations to look into tomorrow!

I noticed out to the west of Sydney central, the house prices drop off a cliff, are these "undesirable" areas?

Sydney is entirely down to a direct reach out from a corporation there, mixed with all the positives you hear about the place (minus cost of living).

 

I had looked at Brisbane last year.

 

My worry is that I'm going to waste the opportunity of a large corp. holding my hand along the way - maybe I should be more patient.

If you have a job offer in that salary range then I'd take it. I didn't live in Sydney so that salary may well be achievable there, I don't know.

Awesome thanks, lots of locations to look into tomorrow!

 

I noticed out to the west of Sydney central, the house prices drop off a cliff, are these "undesirable" areas?

It depends on your definition of "undesirable" I suppose. It is further from the sea, hotter in the summer and colder in the winter, a bit more socio-economically challenged, maybe higher crime (not sure, this is just what people have told me), further from the attractions of Sydney? Obviously lots of people live there quite happily, but I wouldn't necessarily think it'd be worth living there if you've come to experience living in Sydney.

Sydney is entirely down to a direct reach out from a corporation there, mixed with all the positives you hear about the place (minus cost of living).

 

I had looked at Brisbane last year.

 

My worry is that I'm going to waste the opportunity of a large corp. holding my hand along the way - maybe I should be more patient.

I see, well if it's a good opportunity maybe take it up and not worry about buying straight away. Could rent in a much better location.

Brisbane is great if you can get a decent job, though harder to achieve than Sydney. But can buy an apartment 5ks from CBD easily for 400k.

Thanks for the responses.

 

Leichhardt looks like an awesome central location, brief search indicates I'd have to sell a my house, earn more and maybe a kidney or two!

 

I've been doing up to 1.5 hours each way on some of the most notorious motorways in Europe for the past year - I've vowed never to do that again if possible, it's soul destroying, the money doesn't make up for it either.

 

I'm guess I could easily do 1 hour each way sat on a train, anything less is a bonus.

 

The salary range I gave is accurate, it worries me you say even in boom times it would be hard to achieve, so who the hell is living in these $1 houses then?! It sounds like London all over again :-)

Sydney is IMO London all over again but with a better lifestyle opportunity (beaches, weather).

The salary you are quoting is pretty decent but not top-end.

Maybe come over for a holiday and see how you like the place. The lifestyle opportunity is fantastic.

^that

It is London all over again really. Salary equiv in terms of lifestyle as about 50-60k GBP.

Don't go and live in an outer suburb if you're a young professional, the only exception I'd make to this is if you're really near the beach. Outer burbs are very much family zones and quiet, as well as the commute being a pain. You wouldn't move to Manchester and live in Disley, would you?

Hey mate,

What type of property are you looking to buy? How big? Is it just you moving or is there family too? What are the characteristics of an area where you'd like to live (party zone, close to the beach, quiet family area etc.) This will help people give you a better steer.

At $130k-$150k (does this include or exclude super?) you will pay about 30% tax so will take home about $100k, say $7,500-$8,500 per month (calculator on the ATO website for exact calcs). If you a a single professional you can have a very nice life in Sydney for that.

I would recommend that you rent for a year first until you get the lay of the land. In Inner Sydney (<15km CBD) you are talking the guts of $1m for a house. You may get an apartment for maybe $600k-$850k.

Who knows what is going to happen with property prices, there is a growing body of thought that there is an overhang of units coming on the market, particularly in the inner south (Zetland, Alexandria, Green Square) where there has been massive development in recent years. I have heard a few anecdotes where potential renters were offered their pick of 10+ units around there. The consensus expert opinion ("vested interest") is for property to continue to grow in Sydney at 8-10% in 2017 and then flatline in 2018, the infamous soft landing (they predicted that in Ireland in 2007 which then saw 50%+ prices drops over the next 5 years)

Have you heard about negative gearing? Australia is pretty unique in the world for allowing this ridiculous policy. Basically, financially you are better renting where you live and having an investment property. You can claim any net loss on your property income (rent less mortgage interest and letting expenses) against your tax liability on your salary. Rental yields are pretty low at about 3%.

Confused yet?

BTW, I live close to Leichhardt, nice area and Darling Harbour, Central very accessible now that the light rail has been extended. Good restaurants but not much in terms of decent pubs. Oh and you're under the flight path but you do get used to it.

I still love the inner west though and much prefer it the (posher) Eastern suburbs or lower North Shore,

Yes, it's pretty expensive. It's something we might have to tackle in the next year. We used to Live in North Wales, so the property here is 5 x the price!

The impression I get from people I have met over the last 18 months is that people who do buy are generally glad of it a few years down the road, as they all seemed to have done ok with the increase in property prices. Most of them say that it felt 'crazy' at the time, but then they are almost always pleased after a few years when the house has increased in value.

I know a few who have rented for a long time (e.g 10 years) and they feel that they have made a mistake and should have bought. (rent is still expensive too, and it's still money down the drain).

There seems to be a lot of software and tech work here, and those jobs seem to pay well.

There seems to be a lot of software and tech work here, and those jobs seem to pay well.

They do but the rate the OP quoted is exceptionally high. Curious I did some googling and the average software engineer earns around $88k

https://www.glassdoor.co.uk/Salaries/sydney-software-engineer-salary-SRCH_IL.0,6_IM962_KO7,24.htm

As I said if the OP has been offered over $130k I'd go for it!

If you have the deposit, you could get a really nice 1 bed flat (with a big entertaining type balcony or yard if it's the ground floor) in a great Sydney suburb close to the city for around $750,000. Or you could get a reasonable 2 bed flat. Im in Erskineville and the prices seem to be around this here at the moment. Expect high service charges for a flat in a good residential complex with a communal gym, pool and well kept shared gardens etc though.

(Flats / apartments are called 'units' over here).