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Young potential homebuyers look elsewhere amid housing affordability crisis - 9News

Young families looking to buy a home in Sydney are being pushed out of the market as property prices continue to surge.

New research from e61 Institute shows Sydney is rapidly losing its population - particularly people in their 30s - to other parts of Australia as the city's prices reach unaffordable highs.

It comes as the latest PropTrack data shows property prices in Sydney are expected to grow from 3 to 6 per cent.

For sale sign at house
Young Sydney families are increasingly looking elsewhere for a home. (9News)

e61 Institute analyst Elyse Dwyer said over the last 20 years Sydney has lost around 0.5 per cent of its population per year to regional areas and other capital cities as a result of the consistent upwards trajectory of the city's property prices.

Sydney's population size has only maintained due to international immigration, the research said.

"It was people in their 30s leaving at the fastest rate - the age when young families often need bigger homes," Dwyer said.

"Similarly, people in their 40s are leaving at quite a rapid rate - likely for the same reason - and we're also seeing people in the 60s leaving Sydney at a fast rate, possibly accounted for by tree-changing and sea-changing retirees."

Dwyer noted the great move out of Sydney was occurring well before the COVID-19 pandemic when Australia saw more people opting for a tree-change during lockdowns.

The research found most people leaving Sydney were choosing less expensive coastal hubs that are still within commuting distance of the city like Newcastle or Wollongong.

Other capital cities haven't experienced the same migration elsewhere with Brisbane, Canberra, Melbourne and Perth having little domestic outflow while Adelaide averages around half of what Sydney does.

"These trends suggest that big movements of people are happening as a side effect of housing affordability problems," Dwyer said.

"Young people are moving out of Sydney because of a lack of appropriate housing.

"The movements are an unintended consequence of housing shortages and could negatively influence the future of Sydney."

Dwyer forewarned these housing issues, including price and availability, need to be addressed as the population continues to look for cheaper and bigger options. 

The Sydney suburbs where first home buyers are flocking

Sydney's median house price is around $1 million but finding a home in this price range in popular areas that isn't an apartment or duplex is hard to come by.

The high-interest rates, which were put on hold by the Reserve Bank of Australia in August, also act as a deterrent for potential homeowners as it sits at 4.1 per cent.

On a $1 million home loan, the 4.1 per cent rate increases monthly repayments to $2269 from $152 when the cash rate was just 0.1 per cent in May 2022.

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