If you thought it was impossible to buy property as a student in Sydney, it may be time to reconsider. If you want to escape the rent trap, now could actually be a perfect time to invest in property – and it’s certainly possible by making some wise choices. Here are some key strategies for finding excellent value in the city’s property market, even if you’re currently studying.
Invest in an apartment rather than a house
There’s certainly a difference in price between apartments and detached houses. In Eastlakes, for example, there’s a whopping $774,750 between the average price of a house versus a unit. By focusing on apartments for sale in Sydney you could purchase a luxury apartment for the fraction of the price of an older house.
By buying a studio, one or two bedroom apartment you can also be closer to the city for the same money you’d be spending on a larger space further out. This has multiple benefits; you could be closer to your university, closer to cafes and bars to catch up with friends, and closer to the best concerts and entertainment in the city. You won’t have to travel far for study or work. And by buying certain luxury apartments in Sydney such as Waterfall by Crown Group or Infinity by Crown Group, you’ll gain access to a swimming pool and gym within your own building. That could save you hundreds every year and offer a student lifestyle many can only dream of.
Calculate your monthly repayments
Thanks in part to the cost of rent, Sydney came in as the 16th most expensive city to live in the world in the Economist Intelligence Unit’s Worldwide Cost of Living 2019 survey. Expensive rent is dead money – and you could be paying off your mortgage for a similar or even lower amount. Let’s look to the desirable hotspot of Parramatta as an example. At the time of writing, the average unit price for a one bedroom apartment in Parramatta is $470,000. Average rent in the area is $480 per week. Let’s say you purchase an apartment for $500,000 and take out a 30-year principal-and-interest loan with a $60,000 deposit, then your weekly repayments would be $480 – that’s the same amount as your rent per week, all while you’re building your assets and protecting yourself against future rent increases. Increase your initial deposit, and you’ll have even lower repayments.
Buy during the trough, not the peak
It has certainly seemed like Sydney’s property prices could not go any higher in the past, especially if you’re a university student. With the recent downturn, prices have dropped to a far more reasonable level. Sydney house prices have declined 16% in real terms since the last peak in June 2017. This has taken a lot of pressure off first home buyers. Even if you’re planning to buy a luxury apartment in Sydney’s CBD or in a central, up-and-coming area like Eastlakes, that downward pressure on the market has led to some incredible Sydney apartment prices. Plus, you can take advantage of the first home buyer’s grant and stamp duty savings.
By investing well, and acting when the time is right, students can indeed achieve the Australian dream of property ownership.