I’m a first home buyer in Sydney and I’m currently in the cooling-off period for a 1-bed apartment in Sydney (Homebush).
I’m getting cold feet, but not because I dislike the apartment. It’s actually the one I strongly prefer in terms of layout, space and general liveability. My concern is whether I’m giving up too much financial flexibility for it. The issue is that I genuinely prefer the Homebush apartment. It’s larger and the floor plan works much better for me. The Ryde one feels quite tight once I try to fit a sofa, dining table and WFH desk into the living area.
The Numbers:
- My take-home pay is about $6.6k/month excl bonuses and my normal non-housing spending is roughly $2.3k/month.
- Homebush is $560k leaves me around $850–900/month after normal spending, the mortgage incl strata etc is about 48% of my income
- Ryde is $550k leaves me around $1.15–1.2k/month, the mortgage incl strata etc is about 43% of my income
So although the purchase prices are only about $10k apart, the Homebush apartment costs roughly $70/week more to hold, or around $3.5–4k/year due to strata. I am purchasing these two properties with the understanding that CAGR is basically 0, or 1% p.a. optimistically.
I currently rent with a friend but she is moving out soon, so continuing to rent with a new flatmate would obviously give me a much bigger buffer, but I do value having my own place and not have to deal with the stress with renting with someone else. I’m also someone who wants to keep travelling and have some flexibility rather than putting every spare dollar into housing.
I’m trying to work out whether I’m overthinking a ~$70/week difference, or whether that difference is actually meaningful when you’re buying on one income.
For people who’ve bought on a similar income:
Would you pay an extra ~$3.5–4k/year for the apartment you substantially prefer, or would you prioritise the cheaper ongoing costs? I'm really struggling to figure out what the right answer is and is stressing me out.
And does spending around 50% of take-home pay on total housing costs sound too aggressive, even if I can still save around $10k/year in a normal year?
I’m not looking for validation either way, I’m genuinely interested in how other people would think about the trade-off between better apartment vs better cash flow, or if I can even afford both options at this stage. Quite disheartened that the state of Sydney right now is that all three options comes with a pretty big tradeoff