“I call them economic refugees,’’ buyers’ agent Matthew Ward says of the clients who come to him seeking homes in regional NSW centres.
Mr Ward’s company, Aspect Buyers Agency, has offices in Orange and Dubbo, both several hours’ drive from Sydney.
“They are forced out of Sydney and are looking at moving to Orange, Dubbo or Wagga, where their mortgage payments are a third of what they’d be in Sydney,” Mr Ward said.
There’s nothing new about home-buyers quitting capital cities in search of affordable housing. It’s become a familiar story in the past decade as prices, particularly in Sydney, have skyrocketed.
Sydney’s median house price was $878,325 in March. According to view.com.au, Orange’s median house price was $350,000; in Dubbo it was $357,500 and in Wagga Wagga it was $400,000.
— Dubbo City (@DubboCity) July 18, 2017
But Mr Ward said his clients, 80 per cent of whom come from Sydney, often had something else in common. They’re not down-sizers; rather they are young or in mid-career and working in essential services, such as healthcare, education and policing.
“They are in nursing, policing, teaching. Orange has the Department of Primary Industries. Wagga has a RAAF and army base and education centres,” he said.
“Those jobs are steady and pay much the same wherever you live.”
Sydney is a three-hour drive from Orange and five hours from Dubbo, so the buyers are not planning daily commutes. Mr Ward says they want better and more affordable housing – and jobs in their fields.
The migration of essential workers out of the cities is of major concern. A University of Sydney study published this year and commissioned by member-owned Teachers Mutual Bank, Firefighters Mutual Bank and Police Bank found that key areas in Sydney lost up to 20 per cent of teachers, nurses, police and emergency service workers to outer and regional areas in the 10 years to 2016.
“Sydney’s inner-south-west (down 14.6 per cent), inner-west (11.3 per cent), eastern suburbs (15.2 per cent), Ryde (14.2 per cent) and Parramatta (21.4 per cent) all experienced a net loss of key workers,” the study reported.
“Areas including the Illawarra (up 10.5 per cent), Southern Highlands (17 per cent) and Hunter Valley (13.6 per cent) all had net gains.”
A teacher would have needed 13 years to save a 20 percent deposit for a median-priced home in inner Sydney in 2016. In 2006, they would have needed only 8.4 years. Our study with the @UrbanLabSydney at @Sydney_Uni uncovered this and more. https://t.co/bprHXV6Mfx pic.twitter.com/PWFnfPg5I7
— Teachers Mutual Bank (@tmbankau) March 22, 2018
Teachers Mutual Bank CEO Steve James said key workers – who make up 6 per cent of Sydney’s workforce – were still under financial pressure in the city, despite the slight dip in the real estate market.
“Any so-called cooling of the housing market has not trickled down to prices in the range that key workers such as teachers, ambulance drivers, firefighters, paramedics and police officers can afford,” he said.
“It would have to be the Ice Age for any such cooling to fit their salary and household budget.”
In addition, longer commutes, especially in their own cars, led to higher costs and serious social consequences for key workers and their families, he said (employees in the fields in the study had a high rate of shift work, meaning they were more likely to get to work in their own vehicles).
“Critically, lengthy commute times are also associated with lower rates of workforce participation,” he said.
For key workers in the study, annual wages ranged from $57,013 for an enrolled nurse to $98,413 for a senior constable. Based on those figures, the nurse could afford to buy a home worth $321,550 (or pay $329 a week in rent) and the police officer a house for $641,750 (or rent of $568).
The study found rentals were available in those price ranges in Sydney suburbs, but they were mostly apartments. There was much more choice in regional locations, particularly for workers at the lower end of the wage range.
It is similar for buyers, where even cheaper suburbs had limited options for such key workers. Housing was much more affordable in regional areas.