Want to know which are the most affordable suburbs in Australia? In this article, you’ll find some of the best options Australia-wide that are still close to Central Business Districts.
Capital city price increases over 17% see first home buyers and upgraders struggling
In 2020, BuyersBuyers reported that every capital city in Australia represented an incredible opportunity for property buyers. In addition, ultra-low interest rates made purchasing property more of a possibility.
As expected, the Australian housing market experienced substantial growth in the last 12 months. Regional markets saw exceptional price growth, while capital city prices rose 17% year on year to August 2021.
With property prices continuing to increase, housing affordability is back in the spotlight. First home buyers are struggling to bridge the deposit gap, and upgraders are finding prices escalating away from them.
The opportunities and outlook for 2022
Although home prices have been rising over the past year, there are still some affordable options for open-minded home buyers. In addition, many are taking advantage of the COVID-19 landscape shifts and the ability to work from home or remotely, which opens up a greater range of suburb choices.
According to RiskWise Property Research, there are still suburbs, where prices are around 70% of the median capital city house price. These suburbs represent good value and are still within relative proximity to the Central Business Districts (or, in southeast Queensland, the southeast corridor).
There are cheaper suburbs in more distant or less favoured locations, but buying in the lowest quartile of the housing market can sometimes come with its challenges and risks.
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In New South Wales, parts of the Central Coast region, Illawarra, and Sydney’s Outer West areas, including the Blue Mountains, were deemed more affordable, with houses coming in between $800,000 and $900,000 compared to Greater Sydney’s median house price, which now sits around $1.2 million.
For example, despite recording solid capital growth of 41% over the past five years, Blaxland in the Blue Mountains still has a median housing price of under $850,000. At approximately 60 kilometres from the Sydney Central Business District, Blaxland is a difficult commute for those employed in central Sydney. Still, employment opportunities exist much closer than the centre of Sydney, and many workers are now employed on more flexible arrangements. Although the most desirable properties in the area have become expensive, solid detached homes can still be bought today at around the $800,000 mark.
In Victoria, some suburbs on the Mornington Peninsula and in Geelong are also seen also been seen as affordable areas with prices in the $600,000s compared to Greater Melbourne of above $900,000. However, price growth has accelerated in Mornington over the past year.
Both regions are in easy reach of the city and have enjoyed capital growth of, on average, around 50% over the past five years.
For buyers with a tighter budget, Cranbourne North still offers an opportunity to get into the market, with a median house price of under $650,000. The suburb is located approximately 40 kilometres to the southeast of Melbourne’s Central Business District.
Meanwhile, in Queensland, which has a median price for houses in Greater Brisbane of around $650,000, the more affordable areas with good access to the Central Business District include Logan and Moreton Bay South.
Greater Brisbane’s housing market is presently experiencing substantial price growth for detached houses. However, for those with a budget of around $500,000, there is still an opportunity to buy in Acacia Ridge.
Acacia Ridge is located approximately 15 kilometres to the south of Brisbane’s Central Business District and has seen median price growth of around 27% over the past five years. With a median price approaching $500,000, there are still many relatively affordable homes available in the suburb.
In South Australia, Adelaide North had the highest number of affordable houses. The median house price for Greater Adelaide is approximately $550,000, and both new supply and the broader housing market are presently very tight, suggesting that the median house price will soon rise towards $600,000 in the South Australian capital.
Despite this, it’s still possible to buy houses at considerably cheaper price points in many outer-suburban areas of Adelaide.
While the Perth market has not been a strong performer over the past half-decade, some areas still deliver affordability that has demonstrated relatively good growth in the past five years.
The median house price in Perth is around $550,000, suggesting plenty of upside potential as the state’s economy improves in line with the resources cycle.
In the Australian Capital Territory, with a median price of nearly $900,000, houses continued to perform especially strongly throughout the pandemic.
The Australian Capital Territory has appeared to be almost bulletproof for major shocks, largely thanks to a highly robust job market with most employment linked in some way to the government and strong economic growth. However, the recent lockdown will represent the first real test for the city.
In Hobart, too, despite electric house price growth over recent years, many affordable areas still come in well below the median house price, which is now approaching $500,000.