The Inner West is one of the most popular places in Sydney to buy, and first home buyers are a big part of that. The cafes, the transport, the parks and the mix of old and new make it a hard place to say no to. It’s also one of the more expensive parts of Sydney, so it helps to know how first home buyers actually get in.
Here’s how it works, where the entry points are, and what you need to know before you start looking.
Can a First Home Buyer Really Buy in the Inner West?
Yes, but for most first home buyers the way in is a unit.
Houses across most of the Inner West sit well above $2 million. A handful of entry level houses appear on the southern edge of the area, but they’re the exception. Units are a different story. Units are a mainstream product in the Inner West, they sell all the time, and many sit right around the $800,000 mark that matters for stamp duty.
That’s not a bad thing. Units here have strong rental demand, good transport and a lot of character, and plenty of buyers start in a unit and move up later.
Where First Home Buyers Are Buying
Prices move around, so treat these as a guide. We’ve kept the figures broad and you can find more detail in our Inner West suburbs ranked post.
Ashfield and Lewisham are two of the more accessible areas for units, with a lot of stock near the train and light rail. Ashfield in particular has plenty of apartments, which gives first home buyers more choice.
Dulwich Hill has light rail, a growing food scene and a community feel. Unit prices generally sit somewhere between $800,000 and $900,000. You can read our guide to Dulwich Hill for more.
Newtown is the Inner West’s most recognisable suburb, and units there are an active market with strong rental demand. Median unit prices sit around the low $800,000s.
Marrickville has one of the busiest unit markets in the Inner West, with plenty of stock and consistent buyer demand. Prices generally sit around $900,000 to $1,000,000, so it suits first home buyers with a slightly larger budget. We’ve written a full Marrickville property guide if you want to go deeper.
Summer Hill, Stanmore and Petersham all have unit markets for buyers who want quieter, leafier streets and are happy to spend a little more. You can read about Summer Hill, Stanmore and Petersham on our suburb pages.
Leichhardt and Annandale sit at the upper end for first home buyers, but there are older style apartments and converted terrace spaces in both. Our guides to Leichhardt and Annandale cover what to expect.
Stamp Duty: What You Could Save
Stamp duty is one of the biggest upfront costs of buying, and this is where first home buyers in NSW get real help.
Under the First Home Buyers Assistance Scheme, if you’re buying a home at or under $800,000, you pay no stamp duty at all. For a standard buyer, that’s a saving of around $30,000.
If the price is between $800,000 and $1,000,000, you pay a reduced amount. The concession shrinks as the price goes up. At around $850,000 the saving is still roughly $22,000, and it reaches zero at $1,000,000. Above $1,000,000 you pay full stamp duty.
This is why units are such a good fit. Plenty of Inner West units sit under or close to $800,000, which means a lot of first home buyers pay little or no stamp duty.
To qualify, you generally need to be buying your first home, be an Australian citizen or permanent resident, and move in within 12 months of settlement and live there for at least 12 continuous months. The scheme applies to new and established homes.
There’s also a $10,000 First Home Owner Grant, but it only applies to new homes with a lower price cap. Most Inner West purchases are established properties, so it’s unlikely to apply.
The 5% Deposit Scheme
If you’ve saved 5% of the purchase price, the Australian Government’s First Home Guarantee lets you buy without paying Lenders Mortgage Insurance. On an $800,000 unit, a 5% deposit is $40,000.
The scheme has changed a lot recently. Income caps and waitlists have been removed, and the property price cap for Sydney is $1.5 million. That covers almost every unit in the Inner West.
Houses are a different story. Most Inner West houses sit above the $1.5 million cap, so the scheme works best for units and the occasional entry level house.
We’ve written a full explainer on how the scheme works, which you can read here.
What If You Haven’t Saved 5% Yet?
You still have options.
A guarantor loan lets a family member, usually a parent, use the equity in their own property as extra security for your loan. Some lenders will lend up to 100% of the purchase price, and in some cases a little more to cover costs like stamp duty and legal fees. The guarantee is usually limited to the shortfall amount, so your family isn’t putting their whole home on the line. Once your loan drops to around 80% of the property value, the guarantee can be released. You can read more about our guarantor loan service here.
If a guarantor isn’t an option, there’s Skip. It’s a lender that offers home loans with as little as a 2% deposit and no LMI, and it’s only available through brokers like us.
Buying a Unit: What to Look Out For
Because most first home buyers in the Inner West are buying units, a few things are worth knowing before you sign anything.
Strata levies. Every unit in a strata building pays levies for shared costs like insurance, maintenance and sinking funds. Older buildings can have higher levies, and these affect how much you can borrow as well as your running costs.
The strata report. Always get one. It shows the building’s finances, upcoming works and any special levies that might be coming. It’s one of the best ways to avoid a nasty surprise.
Building age and condition. The Inner West has a lot of older stock, which is part of its charm. A building and pest inspection is a must, and the strata records tell you what’s been done and what’s still to come.
Lender policies. Not every lender treats every apartment the same. Some have minimum sizes, and some are cautious about certain buildings. That’s one of the main reasons it helps to get your finance sorted before you fall in love with a property.
Understanding Your Borrowing Capacity
Before you start inspecting, it’s worth knowing what you can borrow.
Lenders look at your income, your living expenses, your debts and a buffer on top of the interest rate. A few things can quietly reduce your borrowing capacity, including credit card limits (even unused ones), buy now pay later accounts and HECS debt. Some lenders will leave HECS out if it’s close to being paid off, so timing can matter.
We’ve written a full post on how lenders assess your loan, which you can read here.
Get a Pre-Approval First
A pre-approval tells you how much you can borrow before you start looking, which means you know your budget and you can move quickly when the right unit comes up.
Ready to Buy in the Inner West?
Buying your first home in the Inner West is achievable, especially with the schemes available right now. The finance side is where good advice early makes the biggest difference.
We’re based in Newtown, right in the middle of the Inner West, and we work with first home buyers across the area every day. We know the local market, and we know which lenders suit which situations.
Get in touch at our Mortgage Broker Newtown page and let’s talk through your options.
