Antony Lawes July 28, 2012
In a city desperate for affordable housing close to the central business district, some of the cheapest options are out of reach for many first home buyers.
Studio apartments can cost less than $200,000 for a tiny room and bathroom smaller than 20 square metres. Areas such as Potts Point and Elizabeth Bay are full of them.
Yet the smaller they are under the 50 square metre benchmark, the harder it is to get a bank loan.
Many of the larger banks require deposits of at least 20 per cent, compared with the standard 10 per cent.
''Studio apartments are often more of a challenge,'' Belinda Williamson, of Mortgage Choice, said.
But agents say the banks are out of touch. David Giezekamp, a director at the inner west agent Callagher Estate Agents, had a 23 squaremetre studio in Glebe pass in at auction last month despite strong first home buyer interest. All were knocked out by the high deposits needed.
''There seems to be a large spectrum of people trying to access the inner city and these restrictions go against the whole grain,'' he said.
The same applies to small studios in new developments.
Adam Sparkes, a group sales manager at Frasers Property, said buyers typically needed deposits of between 20 per cent and 30 per cent for apartments under 50 square metres, which were very popular.
Christina Vaccari, 26, an interior designer and first home buyer, was one of them. She bought a 44 square metre studio in the Central Park development for $495,000 with a deposit of 30 per cent.
She intends to rent it out after living there for a few months.