Home loans in Sydney
As Australia’s most populous and popular city, Sydney is a sought after location for workers, employers and investors. The housing market reflects its popularity, with property prices in Sydney being some of the highest in Australia. As you can imagine, high property values impact the chance of you being successful in acquiring a home loan to purchase a property in the area. Larger than average home loans and hefty deposits are usually required when purchasing property in the city.
What should I know about Sydney?
Sydney is a large and densely populated city with inner suburbs, outer suburbs and the North Shore area incorporating northern beaches and the eastern suburbs. The inner suburbs start from Sydney Cove - the world’s largest natural harbour - and overlook the world famous Sydney Harbour Bridge and Sydney Opera House. Like most cities, the closer you get to the inner suburbs the more expensive the real estate becomes, with the inner suburbs incorporating more high rise apartments than the outer suburbs. Sydney is known for its extensive financial, marketing and tourism industries that drive both the wealth and employment of the city. It is also a hub for foreign tourists and international businesses, such as, banks and multinational corporations.
What aspects of the city influence home loans in Sydney?
With so much demand and little supply, Sydney’s housing market is always under intense pressure and there is a pressing need for more housing developments. Unfortunately, Sydney lacks spare land with little space left to create new houses and developments. With the city’s location on a harbour, there is also limited opportunity to develop on the edges of the city so the outer suburbs are experiencing excessive development. Also, the large amount of historical and heritage listed property in Sydney also prevents new property development on some land. High-rises and multiple dwelling accommodations have become popular with this style of living being cheaper than the typical single story house.
How does this compare to other major cities in Australia?
Sydney’s closest relative, Melbourne, also generally suffers a property shortage due to the increase in demand. Melbourne, like Sydney, is a hub for several national and multinational organisations and is an attractive location for job seekers. With slightly less demand than Sydney and Melbourne the cities of Adelaide, Brisbane and Canberra have less supply and demand problems but still have rising property prices.
What do I need to know about getting a home loan in Sydney?
If you are a first home buyer or on a limited income it may be difficult to obtain an adequate home loan in the city because of the current high level of demand that is pushing up prices. Home loan providers, therefore, may be more hesitant to accept applications and you may have go further to show you are capable of paying off the home loan. The demand for housing in Sydney may also reduce the amount of housing up for sale at any one time. You may have to search for longer to find a property that both suits your needs and your budget. You will have to take this into account when finalising your home loan.