Wealth gap: Majority of workers soon priced out of ‘good‘ suburbs

Brisbane and the Gold Coast are now among the hardest places in Australia to find affordable and liveable suburbs, with households earning less than $180,000 soon to be priced out.

About one in five Queensland income earners would be able to afford a house in the most affordable and liveable suburbs in Brisbane and on the Gold Coast soon.

• Brisbane’s affordable ‘sleeper suburb’

Brisbane and the Gold Coast are now among the hardest places in Australia to find affordable and liveable suburbs, with households earning less than $180,000 soon to be priced out.

A shock result in the latest PRD study found the cheapest median price for houses in its top three most liveable and affordable suburbs in Brisbane and the Gold Coast was about $699,001. It’s a price only 18 per cent of Queensland income earners can afford, according to Australian Taxation Office breakdowns, potentially leaving units the only future option for most families.

MORE: Top Aussie landlord’s tips for tax time

How truck driver bought 17 houses in five years

The report found Perth and Adelaide had the most affordable suburbs out of the study, with Sydney the most expensive, Hobart a middle-priced option and “interestingly, Brisbane, Melbourne, and Gold Coast are now on par, which was not the case two to three years ago”.

Report author Dr Diaswati Mardiasmo said “in some cases Brisbane prices are higher than Melbourne. This is because Melbourne’s prices took a deeper diver due to cash rates compared to Brisbane”.

PRD’s most affordable and liveable suburb in lower South East Queensland is on the Gold Coast.

The PRD study named the most affordable liveable suburbs in Brisbane as Capalaba ($750,000 median house price), Springwood ($785,000) and Deagon ($840,000) while on the Gold Coast the top three were Oxenford ($785,000), Arundel ($850,000) and Upper Coomera ($699,001).

Australian Taxation Office breakdowns show a mere 18 per cent of Queensland income earners – that is those earning $90,000 and over – would be able to work up mortgages for houses at those levels, assuming workers in the lower end of the group do so in partnerships. Only about 2 per cent of Queensland income earners in ATO breakdowns would be able to buy a house on their own at those prices given their income of more than $180,000.

The Queensland average home loan was $524,635 as of Q42022, with Dr Mardiasmo warning higher house prices would leave cheaper, less desirable areas as the only choice for many families – including those on an average wage, single parents, people on government benefits, pensioners and even divorcees.

PRD chief economist Dr Diaswati "Asti" Mardiasmo.

“For Brisbane this (study) has been the most challenging thus far, in terms of finding suburbs that can tick all of the liveability boxes and have a wide berth/distance between the suburb price and Brisbane Metro,” she said.

“The ones that do have a good/affordable price – say half of the Brisbane Metro price – so around your $500,000 to $600,000 – couldn’t satisfy some of the liveability requirements, whether it’s crime or project development. They exist of course but just depends if you are willing to give up the liveability factors.”

Time is running out for those looking to get in while prices are still within reach. In Brisbane “an undersupply is evident, especially for houses” with prices starting to turn despite cash rate hikes, Dr Mardiasmo said.

“For those seeking a more affordable house market, time is of the essence.”

Houses across the majority of suburbs in Brisbane are being priced out of reach of most income earners. Picture: Brisbane City Council

On the Gold Coast, 47 per cent of houses sold in the past year were in the premium price point of $1.05m and above, and while conditions favoured buyers with sellers accepting below initial listing price “the average vendor discount for Q1 2023 is less than Q4 2022, suggesting confidence has started to return and time is limited”.

RateCity.com.au research director Sally Tindall, said “the wealth gap is widening across the country”.

“Some families are buckling under the pressure of rising rates, while others are beefing up their savings in offset accounts,” she said. “Soaring mortgage rates have decimated people’s borrowing capacity.”

Dr Mardiasmo said there was “definitely more chance” at landing a home in an affordable and liveable suburb across both Brisbane and the Gold Coast if buyers were willing to live in units.

“The question is, are we all ready to live in units? Does that suit our needs?” she said.

RateCity research director Sally Tindall said the wealth gap is widening across Australia. Picture: Tim Hunter.

“For units, Brisbane proved to be the most affordable city for liveability. Unit buyers can benefit from a discount of -24 per cent when accessing units in a chosen suburb, higher than the -3 per cent discount for unit buyers in Brisbane CBD.”

The top three most affordable liveable suburbs in Brisbane for units were Bald Hills ($422,500 median), Springwood ($350,000), and Dutton Park ($422,000), while on the Gold Coast it was Oxenford ($455,000), Arundel ($525,000) and Biggera Waters ($503,000).

The liveability criteria used to uncover the chosen suburbs included determining areas with low crime rates, availability of amenities within a 5km radius like schools, green spaces, public transport, shopping centres and health care facilities, and an unemployment rate either on-par or lower than the Queensland average.

Dr Mardiasmo said buyers who simply wanted to find the most affordable suburbs had two choices cheaper than Upper Coomera on the Gold Coast for houses – Pimpama (median $640,000) and Coomera ($655,875).

Across Greater Brisbane region, there were 24 suburbs with lower median house prices than Brisbane’s most affordable liveable suburb Capalaba, stretching from Gailes in Ipswich ($410,000) to Richlands in Brisbane City ($725,000).

On lower median house price alone, there were three others in Ipswich – Goodna ($463,750), Redbank ($511,000) and Camira ($670,000). Logan had three – Logan Central ($465,000), Woodridge ($465,000) and Slacks Creek ($542,500).

MORE: See the latest PropTrack Home Price Index

There were 11 more that were cheaper for houses in Brisbane: Ellen Grove ($547,000), Inala ($560,000), Durack ($624,000), Acacia Ridge ($645,000), Wacol ($648,000), Fitzgibbon ($655,000), Darra ($665,000), Forest Lake ($680,000), Bald Hills ($697,500), Doolandella ($700,000) and Zillmere ($715,000).

Moreton Bay Regional Council has four suburbs with more affordable median house prices than Capalaba including Strathpine ($650,000), Lawnton ($660,000), Bray Park ($665,000) and Griffin ($691,000) while Redland City had just one Alexandra Hills ($720,000).

FOLLOW SOPHIE FOSTER ON TWITTER

Originally published as Wealth gap: Majority of workers soon priced out of ‘good‘ suburbs