Where to buy a house in Melbourne without asking mum and dad for money

Homebuyers without access to the bank of mum and dad would struggle to buy in much of inner Melbourne, even if they earn an above-average wage, new analysis shows.

Even high-earning couples would need to make compromises when looking to buy a freestanding house, CoreLogic’s head of Australian research Eliza Owen said.

“So immediately we can see that for people looking to get into the market on their borrowing capacity and their 20 per cent deposit alone, it’s more peripheral areas of Melbourne that are affordable,” she said. “There’s a relatively high distance to the CBD that even a high dual-income couple would be accepting to afford a detached house.

“The average house market that was affordable was 28 kilometres from the CBD. There are definitely some markets that are accessible that are relatively close, but really just a handful of those markets.”

A single buyer, even if they earn an above-average wage of about $125,000, had few options to buy a house in Melbourne. They could afford to buy in suburbs no closer to the city than Broadmeadows, Jacana or Kealba. Just 52 suburbs were affordable, the analysis of CoreLogic figures and Canstar modelling showed.

It was easier for couples. A pair of house hunters where one member earned an average income of about $100,000 and the other a lower income of about $75,000 were able to choose from 194 affordable suburbs, though much of the inner city was out of reach. Kensington, Flemington and Footscray were the closest options.

A couple where both members earned an above-average income had the most options, but were still locked out of many desirable inner-city suburbs. Windsor, Collingwood and Brunswick were all affordable, however.

Owen was concerned unaffordable housing pushed people who would rather live alone into relationships.

“It does kind of open up this interesting discussion around autonomy in housing,” she said. “Obviously, you don’t want to be pressured to be in a relationship to access housing. I think in an ideal world people would live with others as a choice rather than a necessity.”

Canstar data insights director Sally Tindall said rising house prices were pushing buyers without access to intergenerational wealth away from the city centre.

“People are increasingly having to look further afield, perhaps in suburbs they’ve never considered before or heard of,” she said. “But what we know from property prices is the long-term trend is that they’re on the rise and a lot of people have been priced out of their family suburb when they go to buy their own first home.”

Axton Finance broker Luke Rowland said prospective buyers were comfortable with compromise.

“If they’re not happy with what they can afford in a suburb, they’ll look for something that ticks the boxes in another one,” he said. “First home buyers have a bit more confidence coming back. They’re not coming in with one or two [potential] suburbs, they’re coming in with five or six.”

A single buyer with an above-average income could afford to buy a unit without help in 160 suburbs, including many in the inner city. A couple where both earn the average income were only locked out of two suburbs, and a couple where both earn more than average were locked out of none.

Apartments were typically seen as less desirable because of a historic lack of capital growth, which can make it harder to build wealth, and widespread construction quality issues.

Jas Stephens agent George Alexander sells in Melbourne’s inner west; he said fringe areas were the most affordable for buyers on a budget.

“I’m starting to see good value in Ardeer and Albion,” he said. “You can buy a freestanding house for $600,000-plus, $700,000-plus, but they’re just small suburbs and people don’t really know about it. You can get a house in West Sunshine for $650,000.

“It’s definitely doable, especially if you don’t have a body corp [as would be the case] if you bought an apartment.”

Apartments in the area were offering single buyers the opportunity to purchase a home on their own, though, Alexander said. “I’m selling a truckload to younger single girls who are renting, they’re buying one-bedroom apartments or a villa unit.

“They can service that for the same price they’re paying in rent before. If you’re a single person or a young couple, you can get a one-bed flat in Footscray that will start at $300,000, $350,000, and you’re five kilometres from the city.”

Rowland said the high cost of housing meant some buyers needed another income to enter the market. “They’re looking to get in where they can. Maybe they’re looking to buy with their partner to boost their capacity.”