Sydney Housing Affordability Nearing 10-Year Low
Despite a rise in listings, affordability is worsening.
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Sydney’s housing affordability worries are set to deepen to its worst level in a decade amid surging prices according to modelling by Moody’s Investors Service.
The ratings agency predicts that Sydney will reach its worst affordability in 10 years if prices rise by a further 4.6% or, alternatively, should mortgage lending rates increase by as little as 42 basis points.
Using data from CoreLogic, this level could occur soon as Sydney’s dwelling prices have already surged 1.7% in the past four weeks.
To arrive at a calculation of affordability, Moody’s analysts show housing affordability as the proportion of the average household income borrowers need to meet repayments on new mortgages based on the median housing sales prices, 80 per cent loan-to-value ratio over a 25-year principal and interest repayment period. Then, a lending rate equal to the average discounted variable interest rate for owner-occupiers published by the RBA is applied.
Currently, in Sydney, new borrowers need 35.4% of household income to pay their mortgages – significantly higher than the 28.3% needed for Melbourne and 20.6% for Brisbane.
Moody’s modelling shows that should mortgage lending rates rise by 25 basis points, Sydney’s average homebuyers would need more than 36% of their household incomes to afford mortgage repayments – Melbourne would need roughly 29%.
Across the country, Moody’s report expected affordability to reach its worst level in a decade should housing prices rise by 15% or if the mortgage rate leapt to its average for the past 10 years of 4.79%.
If housing prices increase by 15%, the share of income to meet mortgage repayments will pass the 28.9% peak of the past 10 years for Australia on average.
The average Australian household with two income earners needed 25.1% of monthly income to meet monthly mortgage repayments in September – up from 24.6^ in February and just below the 10-year average of 25.8%.
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The 25-room mansion was built for an heiress and later belonged to a socialite and architect on the Empire State Building.
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A 110-year-old Colorado estate that has hosted Frank Sinatra and Lyndon B. Johnson just slashed $10 million off its price tag.
The 12,000-square-foot manor house—with 25 rooms—and its five accessory dwelling in the alpines of Evergreen was relisted on Friday asking $16.8 million, down from its initial $26.8 million price in 2023.
The sellers, Richard and Pamela Bard, who paid $1.3 million for the “legacy property” named Greystone Estate in 1992, have shopped it around on and off for the past 20 years, according to agent Jessica Northrop at Compass Real Estate.
Richard Bard, CEO of his own private equity firm, has “hosted many corporate events and retreats where important business is discussed but they are also able to relax,” Northrop said. “Greystone has a special way of making people feel at ease.”
Bard said “it’s not a casual effort” to sell. He said it’s difficult to find a buyer with the facilities to “take care of it.”
The Bards intend to move closer to their children in Denver.
Before the Bards, Greystone Estate had several eras—as a summer house, a guest ranch and a business base—since it was built in 1915 by Genevieve Phipps, an industrialist’s daughter.
Phipps, who spent her inheritance on the land, built the 54-acre summer escape with the “elegance and feel of a fine Adirondack mansion combined with a mountain rustic style,” according to an online record of the estate’s history.
Its heyday, arguably in the 1940s to 1980s, saw Sinatra, Johnson and Groucho Marx come through its doors, when its owner William Sandifer, a socialite and one the Empire State Building’s architects, operated a guest ranch out of the place.
The Bards, who used a carriage house on the property as their company headquarters, completed Greystone’s full modernization in 1997. They also opened up the living and dining areas to receive more light, raised the ceiling on the upper level and combined several rooms to create a primary suite.
They replaced an outdoor pavilion and its helipad with something more suitable for their daughter’s wedding in 2001, according to Northrop.
The main 25-room manor includes a wine cellar, bar, gym and library.
The additional structures, which include a cottage, a log cabin, a pool house, a carriage house and a pavilion and guest house, surround the pool area and overlook acres of aspen groves and mountains.
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