Australia’s younger generation certainly has it tough when it comes to getting a foot on the property ladder.
And for those with ambitions beyond a one or two-bedroom apartment, the number of affordable houses seems to be increasingly small.
House prices are surging at levels well beyond wage growth, meaning those wanting to buy their own home with a backyard are finding themselves priced out of the market.
The situation is especially dire in Sydney, Brisbane, Adelaide and Perth, where the most aggressive rate rises in a generation have failed to slow down the turbocharged property market. Meanwhile high overseas immigration has led to a spiralling rental crisis.
Even the more affordable postcodes, such as those in southeast Queensland, are seeing record-high growth as Sydneysiders flee north.
One glimmer of hope for first-time buyers is Melbourne, where house prices have fallen during the past year, with land taxes turning off investors.
But what does all this mean for a young person seeking to buy? Or an investor? Or a parent looking to help their child onto the property ladder?
These are the numbers: a person on an average, full-time salary of $100,017 is able to buy a house worth up to $650,110 if they have a 20 per cent deposit of $130,022.
Australia’s younger generation certainly has it tough when it comes to buying a house (pictured is a Sydney auction)
The banks are only able to lend someone 5.2 times their salary, which means the average Australian buying on their own can borrow $520,088.
But this will mean putting 38 per cent of pay before tax on monthly mortgage repayments, putting these types of borrowers in mortgage stress territory.
If this is a risk you’re prepared to take, we’ve researched the suburbs where an ordinary Aussie can still buy a proper house on their own.
But buyers should act fast before potential rate cuts in 2025 lead to even more activity in an already hot market.
Woodridge, just 22km south of Logan’s city centre, still has an affordable mid-point house price of $620,294
Woodridge, Queensland
- Logan house prices have doubled during past five years
- Woodridge’s median house price is still affordable at $620,294
- Market attractive to both investors and owner-occupiers
Median house prices in Logan, south of Brisbane, have doubled over the past five years in an area along the M1 motorway linking the Queensland capital with the Gold Coast.
But suburban Woodridge, just 22km south of the city centre, still has an affordable mid-point house price of $620,294 – a level well below Greater Brisbane’s $977,575, based on CoreLogic data.
James Kirkland, the executive general manager of sales at Little Real Estate, says Logan was one of Australia’s hottest markets because it was attractive to both investors and first-home buyers.
‘Based on what we’re seeing, there are no signs of a slow down in that region of Logan City,’ he tells Daily Mail Australia.
‘That’s hands down one of the most in-demand areas in Brisbane.
‘With the increase in southern investors into that market, you’re finding that investors and first-home buyers are fighting it out in the suburbs of Logan.’
San Remo, near Tuggerah Lake and 115km north of Sydney, has a median house price of $692,302, which means a buyer would have to look for bargain below the mid-point for the area
San Remo, Central Coast, New South Wales
- NSW Central Coast has houses for under $700,000
- That’s less than half Sydney’s median $1.5million mark
- An option for those working in Sydney who still want a backyard
Sydney’s median house price of $1.5million is well beyond the reach of most buyers, unless they are earning $226,621.
They would still be in mortgage stress, too, spending more than a third of their pay on servicing a home loan despite being among the top 2.3 per cent of income earners.
‘By yourself, at the average wage, to buy around that mid-$600,000 – let’s face it, unless you’re buying a very small townhouse, anywhere close to the city, I just don’t think it’s possible,’ Mr Kirkland says.
‘If it’s a freestanding house, you’re going to struggle.’
But there are pockets of the Central Coast, an hour’s drive north, where it is still possible to buy a house for slightly more than $600,000.
San Remo, near Tuggerah Lake and 115km north of Sydney, has a median house price of $692,302, which means a buyer would have to look for a bargain below the mid-point for the suburb.
It is a 20-minute drive from Wyong train station – itself a two-hour trip to Sydney’s Central Station.
‘It would be probably almost quicker to get from the Central Coast to Sydney than it would sitting in traffic from the outer fringe of the western suburbs,’ Mr Kirkland says.
Meadow Heights, 26km north of Melbourne’s city centre, has a median house price of $578,590 with prices only rising by 0.9 per cent last year
Meadow Heights, Melbourne
- Melbourne still has suburbs with $600,000 house prices
- They are well below greater Melbourne’s $917,616 median
- Pockets of affordability unlike Sydney or even Brisbane
Melbourne’s northern suburbs have postcodes where median house prices are under $600,000 and at levels well below the Victorian capital’s mid-point of $925,762.
Meadow Heights, 26km north of the city centre, has a median house price of $578,590, with prices only rising by 0.9 per cent last year.
‘It hasn’t had that level of growth and there’s still pockets where it is affordable to buy a house,’ Mr Kirkland tells us.
‘In the north-west area, the infrastructure is there to get you into the city quite reasonably.’
The Victorian government’s flat $975 investor land tax, to pay for the Covid lockdowns, has been blamed for a 2.9 per cent fall in Melbourne house prices last year.
This has kept property price growth well below the 3.5 per cent increase in wages, giving buyers more choice at the lower end of the market.
‘This is going to be an interesting time for Melbourne because the city’s been so dormant – there’s a swing back to that because it’s showing better value and it just hasn’t had that capital growth.’
Adelaide’s northern suburbs have affordable homes, with Salisbury having a mid-point price of $645,477 at just 25km north of the city
Salisbury, Adelaide
- Adelaide’s north has suburbs affordable for average-income earners
- Salisbury house prices have soared by 19.5 per cent in just a year
- But the median house price of $645,477 still relatively affordable
The South Australian capital has been one of the strongest property markets with median house prices surging by 12.5 per cent in a year to an even more unaffordable $866,327.
But Adelaide’s northern suburbs still have affordable homes, with Salisbury having a mid-point price of $645,477 and it’s just 25km north of the city.
Prices here have soared by 19.5 per cent in a year.
‘If you’re talking about accessibility into the city, Salisbury is only a very short drive,’ Mr Kirkland says.
Unlike Brisbane, Adelaide has a greater proportion of owner-occupiers, which means less competition from potential investors.
‘The Adelaide market, it’s obviously had a good run but it hadn’t previously – it’s almost like this pent-up growth that was bound to happen,’ Mr Kirkland says.
Perth’s median house price of $847,518 is now beyond the reach of average-income earners buying on their own – but there are still affordable suburbs like Nollamara, just 9km north of the city, where the mid-point price is $684,473
Nollamara, Perth
- Perth is Australia’s strongest performing market
Western Australia’s mining-rich capital has been the nation’s strongest performing market with house values soaring by 18.7 per cent in 2024 as an influx of new residents moved from other states.
‘What’s driving that is shortage of stock,’ Mr Kirkland says.
Perth’s median house price of $847,518 is now beyond reach of the average-income earners buying on their own – but there are still affordable suburbs like Nollamara, just 9km north of the city, where the mid-point price is $684,473.
State of play
Mr Kirkland says the typical first-home buyer was getting in with help from the ‘Bank of Mum and Dad’.
‘The profile that are buying on their own if they’re, say, a younger purchaser – they’re normally coming through with a parent,’ he said.
‘There is support from the Bank of Mum and Dad, whether that be a loan insurance guarantee or whether that’s a deposit that’s been given.’
Reserve Bank Governor Michele Bullock has ruled out any rate cut within the next six months, but rate cuts in 2025 are set to fuel even more competition at the affordable end of the house market as more people look to move out of apartments.
‘We’ll start to attract more first-home buyers into the market,’ Mr Kirkland says.
‘It’s going to be high-velocity activity once that occurs.’
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