Where to buy in QLD and still have enough cash for a night out

They are the Queensland suburbs where homeowners are the least likely to be hit hard by interest rate hikes, and still have some fun money left in the bank. And they aren’t all out in the sticks.

They are the Queensland suburbs where homeowners are the least likely to be hit hard by interest rate hikes, and they range from affordable towns to some of the state’s most sought-after suburbs.

Surprising new data from REA Group shows there are 588 Queensland house suburbs where the proportion of income used to cover mortgage costs is 28 per cent – the generally accepted benchmark – or below.

RELATED: What an interest rate rise will mean for every QLD suburb

When that income-to-mortgage repayment exceeds 28 per cent, mortgage stress can kick in, but the data shows that even though some markets have gone completely mad, many homeowners outside of the booming southeast corner are sitting pretty.

And the options on where to live get even better if you are willing to downsize.

If you bought a home outside of the booming southeast corner and earn a decent wage, chances are you will be less financially stressed when rates do rise. iSTOCK

It comes as new NAB research revealed that almost one on 10 Aussies had moved during the Covid-19 pandemic, and were not planning to return.

Around 7 per cent of the 2000 respondents said they had moved within their state or territory and planned to stay where they are, while 2 per cent had moved interstate and had no intention of returning.

REA Group experts recently analysed current median property values, average incomes (2018/19, ATO) and current average monthly mortgage repayments with a 2.5 per cent interest rate in each Queensland suburb.

The researchers then looked at how rate hikes of 0.25, 0.5 and 1 per cent would affect each suburb, with the data suggesting homeowners in some suburbs would be hit harder than others.

REA PropTrack economist Paul Ryan said he expected to see the exodus to affordable regions to continue in the short to medium term, but after that, the trend would depend on the continuation of flexible working arrangements.

“Australia is a huge country and there are some great and affordable places (to live) away from the rat race if you don’t have to be leashed to an office in a city,” he said.

“And that’s the great thing that may come out of this, with the narrative around the Great Resignation being that people will be looking for jobs that give them a lifestyle, and employers won’t just be competing on wages, but also on flexibility.”

The data shows that homeowners in Collinsville, a rural town in the Whitsunday region, have the lowest income-to-mortgage repayment ratio of 2.8 per cent, with median house prices there just $100,000 and the average annual income sitting at around $68,385.

The township saw huge drops in house values during the resources downturn, but there are early signs of recovery, with the median sales price up 17.6 per cent in 12 months.

But after years in the doldrums, house values are on the rise again in Collinsville, with this one recently selling for $200,000.

Other locations where homeowners spend the least amount of their income on their mortgage range from the mining towns of Dysart, Blackwater and Moranbah to the bigger regional centres of Rockhampton City, Charters Towers, Mackay, Gladstone and Bundaberg.

MORE NEWS: The QLD regions poised for property price growth in 2022

‘Sleepwalking into disaster’: Properties to flood market once interest rates rise

Homeowners in the Mackay region have among the lowest income to mortgage repayment rations in Queensland after house values fell during the resources downturn. Picture: Rae Wilson

The data shows there are 88 suburbs across Queensland where homeowners, on average, spend less than 10 per cent of their income on mortgage repayments.

And even if rates rise by one percentage point, owners in 52 of those suburbs will potentially still be outlaying 10 per cent or less of their annual income.

Queensland’s capital of the north, Townsville, boasts 18 suburbs where homeowners have among the state’s lowest income-to-mortgage repayment ratios, with half of those still paying below 10 per cent of their annual wage even if rates rise by 1 per cent.

This four-bedroom house with a pool sits on a 876sq m block at Bushland Beach, and recently sold for $500,000 – that’s a whole lot more house than you could get in the southeast corner.

But that might not last long, with Terry Ryder of Hotspotting tipping that Townsville will be one to watch in 2022, saying the garrison city was “poised for growth”.

“There has been exceptional price growth in many suburbs in 2021,” he said.

“Townsville has proven its strength and resilience in the past … the local economy and its property market are now booming.”

RELATED: The QLD regions poised for property price growth in 2022

Local agents are also tipping a strong summer of sales once domestic borders open.

“I reckon we are just at the starting line,” Ray White Kirwan agent and auctioneer Craig Currie said.

Townsville is “poised for growth”, according to Terry Ryder from Hotspotting

Further north, homeowners in the Cairns suburb of Manoora are the most likely to be financially comfortable, forking out, on average, 11.1 per cent of their annual income on a mortgage.

Homeowners in Mackay are also in good shape should rates begin to rise, currently spending around 8.9 per cent of their income on repayments, but that rises to 9.3 per cent in North and South Mackay and to 10.8 per cent in the beachside suburbs of Bucasia and Blacks Beach.

The data shows that there are also a number of suburbs across many other regions, including Toowoomba, the Fraser Coast and Bundaberg, where homeowners are paying below 20 per cent of their annual wage on their mortgage.

In Greater Brisbane, many of the suburbs where homeowners will likely be the least stretched should rates rise can be found in the more affordable outer ring, and in places like the Ipswich, Lockyer Valley, Logan and Somerset regions.

There are currently 138 suburbs across Greater Brisbane where homeowners dedicate 20 per cent or less of their annual income to repayments, and they range from family suburbs such as Strathpine, Springfield Lakes and Kenmore to beachside suburbs in the Moreton Bay region.

New residential estates often offer more affordable entry point options for buyers

But when unit markets are added to the mix, the number of suburbs where buyers dedicate less than 10 per cent of their income to repayments explodes, taking in many of the southeast’s most sought-after suburbs including Hamilton, New Farm and Ascot (Brisbane), Southport and Burleigh Waters (Gold Coast) and Buderim and Maroochydore (Sunshine Coast).

The house market may have gone crazy on the Sunshine Coast, but a unit in Maroochydore may still be within reach. Picture Lachie Millard

NAB Executive of Home Ownership Andy Kerr said Covid-19 had fundamentally changed how Australians purchased a home.

“The pandemic has impacted the lives of millions of Australians, particularly with how and where they want to live,” he said.

“What we have seen as a result is flexible working providing opportunities for people to live wherever they like and still work from home.

“Without the daily commute, people are looking at the suburbs that haven’t been available in the past as a viable option … Australians also clearly value lifestyle choices, having that work-life balance and being closer to family.”

It didn’t take long for the congestion to return after lockdowns were lifted in Sydney. Picture: NCA NewsWire / Jeremy Piper

But Mr Kerr said there were already early signs of buyers focusing back on city living.

He said that while there had been “huge growth” in outer suburbs and regions, first home buyers, in particular, were starting to explore closer to cities once again.

“Units are offering value because price growth has been more subdued, and while 12 months ago people weren’t sure if they would ever go back to the office, with vaccination rates increasing, the cities are becoming more alluring again,” he said.

“We are also seeing some early signs of house prices easing, and our forecast is for the market to stay strong this year but become more subdued next year.

“The thing I would say to buyers, particularly younger buyers, is to buy what they can afford but don’t make decisions based on the world today because it could look quite different in six months time.”

The median house price in Brisbane’s Kangaroo Point is $1.66m but for a unit, it is $517,000, with a two-bedder in this complex listed for offers over $600,000

Originally published as Where to buy in QLD and still have enough cash for a night out