Grim sign Aussie house prices are out of control

House prices have become unaffordable for most people, but an expert has revealed the suburbs in every city where buyers can still get a good deal.

Sydney’s house prices have effectively become unaffordable for the average resident and some other capital cities are not far behind, but one city is offering a better deal for people willing to make a move.

New data shows only 11 suburbs in Sydney have a median house price sitting at or below the borrowing capacity for buyers, based on the average income of about $90,000.

In Canberra there are only six, while in Hobart there are 10 and in Darwin there are 23.

Melbourne has 54, while Adelaide has 124 and Brisbane has 125.

But Perth has a much bigger availability with 216.

The metric is based on the assumption a single income buyer has a 20 per cent deposit saved, with a borrowing capacity based on $2000 per month in expenses and post-tax income based on their state’s average annual earnings.

PropTrack economist Angus Moore told NCA NewsWire every capital city faced a slightly different scenario.

Sydney’s house prices have become unaffordable for the average resident. Picture: NCA NewsWire / Nikki Short

SYDNEY

Mr Moore said it was widely understood Sydney was a very expensive city.

“For someone on average earnings for NSW, which is about $93,000 or a little bit over if you’re working full-time, there’s not an awful lot of suburbs that fall under what you could currently borrow with that sort of income,” he said.

“Now, many people have more than one income earner, so this is not necessarily saying no one can afford to buy in Sydney.

“But it is, I think, quite indicative of the fact that Sydney is an expensive housing market, even relative to its reasonably high income.”

Mr Moore said people struggling to buy a house might be better off looking for a unit.

“Not everyone will be looking for a house. Some people will want units – those are more affordable,” he said.

The top five affordable suburbs are:

• Emerton – $700,000
• San Remo – $697,5000
• Mannering Park – $690,000
• Airds – $688,000
• Blackett – $688,000

People struggling to buy a house in Sydney might be better off looking for a unit. Picture: NCA NewsWire / Nikki Short

MELBOURNE

The Victorian capital faced a similar situation, Mr Moore said.

“It’s not quite as expensive as Sydney, so there is a few more suburbs that fall under that threshold,” he said.

“Many of these are in the west and northwest part of Melbourne, where there is a lot of development and a lot of new homes being built, and these tend to be a bit more affordable.

“But even so, many of these suburbs are sitting around $600,000 to $700,000 median house prices, which is still really quite expensive.”

The top five affordable suburbs are:

• Mernda – $685,000
• Epping – $680,000
• Sunbury – $680,000
• Warneet – $680,000
• Cranbourne West – $676,000

Melbourne is not quite as expensive as Sydney. Picture: NCA NewsWire / Nikki Short

BRISBANE

Mr Moore said Brisbane was a more affordable city than Sydney and Melbourne.

“It’s gotten a lot more expensive in the past couple of years,” he said.

“We’ve seen very strong growth in Brisbane, as a lot of people have moved there in the past two years, even more so than usual.

“But even so, it does remain more attractively priced than Sydney and Melbourne for houses and for dwellings broadly.

“There’s a lot more suburbs that fall under that threshold of what someone on an average income, working full-time could afford to borrow and purchase.”

The top five affordable suburbs are:

• Bahrs Scrub – $660,000
• Augustine Heights – $660,000
• Meadowbrook – $653,000
• Lawnton – $651,000
• Acacia Ridge – $650,000

Brisbane has become more expensive in the past couple of years. Picture: NCA NewsWire / Nikki Short

PERTH

Western Australia’s capital has a more unique scenario, with average full-time earnings at more than $100,000 per year.

“It’s actually quite a high average income state … in part, that’s because of a number of very high-paying jobs in the mining sector that help drag up that average,” Mr Moore said.

“But what that means is when we look across Perth, which is not as expensive as Sydney and Melbourne, given that average incomes are higher, there is a lot more that’s affordable for someone looking to buy in Perth.”

Mr Moore said there had not been the same up tick in prices for Perth, as seen in similarly sized capitals like Adelaide and Brisbane during the pandemic.

In part, that was because it was difficult to get into WA when the hard border was up, but also due to it being far from the east coast, Mr Moore said.

“It makes living there and commuting to Sydney once every fortnight a bit more difficult than is the case from somewhere like Brisbane,” he said.

The top five affordable suburbs are:

• The Vines – $780,000
• Murdoch – $767,000
• Bedford – $764,000
• Guildford – $760,000
• Jandakot – $760,000

The average full-time earnings in WA are more than $100,000 per year, largely due to the mining sector. Picture: NCA NewsWire / Gaye Gerard

ADELAIDE

Mr Moore said Adelaide was in the “same boat” as Brisbane in being a relatively affordable city.

“Across Adelaide, median dwelling price, not necessarily homes, is $650,000 versus $760,000 in Brisbane, so it is a more affordable city,” he said.

“It is also a lower income state, so that means borrowing capacities on this metric are lower – it’s the lowest average income state behind Tasmania.”

Mr Moore said much like Brisbane, Adelaide prices had grown extremely quickly across the pandemic.

“It’s been one of the better performing cities even this year, even as prices have turned down,” he said.

“Much like Brisbane, it’s benefited from a lot of people moving to it from Sydney and Melbourne, seeking larger homes.”

The top five affordable suburbs are:

• Aberfoyle Park – $621,000
• Hewett – $620,000
• Seacombe Gardens – $620,000
• Woodville North – $620,000
• Largs North – $617,500

HOBART

Tasmania’s capital was one of the more difficult cities to purchase a home on this metric, Mr Moore said.

“In part, because it is actually a reasonably expensive city now,” he said.

“It too saw a big kick up in prices across the pandemic.”

The top five affordable suburbs are:

• Claremont – $585,000
• Rokeby – $553,500
• Chigwell – $529,500
• Primrose Sands – $525,000
• Bridgewater – $485,000

Hobart has seen a boost in house prices during the pandemic. Picture: NCA NewsWire / Gaye Gerard

CANBERRA

The nation’s capital is the highest income jurisdiction, with average full-time earnings of more than $100,000.

Even so, prices in Canberra were very expensive, Mr Moore said.

“In part, because it is a very high income city with lots of people on stable, high income jobs in the public sector,” he said.

“As a result, we see quite expensive prices and as a result, there’s very few suburbs that fall under what someone on full-time earnings could afford.”

The top five affordable suburbs are:

• Richardson – $800,000
• Lawson – $785,000
• Banks – $785,000
• Phillip – $750,000
• Charnwood – $720,000
  

DARWIN

Average incomes in the Northern Territory were reasonably high, Mr Moore said.

“They’re not that far behind some of the eastern states, so on that metric, this ends up looking reasonably affordable,” he said.

“Because it’s a small city, on this metric, it’s not maybe as good a way to measure how affordable Darwin is.”

The top five affordable suburbs are:

• Zuccoli – $585,000
• Wagaman – $580,000
• Humpty Doo – $580,000
• Jingili – $570,000
• Rosebery – $570,000