• The most affordable city suburbs for first home buyers in 2022

    Yes, we are in the midst of a modern-day housing boom but there are still some city suburbs many first home buyers can afford.

  • Yes, we are in the midst of a modern-day housing boom but there are still some city suburbs many first home buyers can afford.

    First home buyers can feel cut out of the market in our capital cities — especially after the nation's median house price recently exceeded $1 million. In Sydney alone the median house price is over $1.6 million!*

    But it's not all bad news. There are still hidden gems to be found and incentives to help you along.

    "Every market in every city will have affordable pockets if you are willing to over look certain aspects of the property," says Tina Wodecki, Franchise Principle at RAMS Home Loan Centre in Ryde, NSW.

    "If your budget is restricting you from being able to buy your dream home then you can always settle for what you can afford if location is important. Perhaps consider a fixer-upper and get your hands dirty by doing some of the renovations when you can afford it," she says.

    "Properties that are slightly less desirable due to being next to train stations, high voltage powerlines, schools, main roads, and so on, are generally are 20-30% lower in price, so are a good entry point to get into a particular area."

    Wodecki says first home buyers may have to let go of the dream home to get into the market, but that doesn't mean they can't get a great property through other means.

    "I’m a big advocate for turning the home you can afford into your ‘dream home’ instead of waiting to find it," she says. "You can’t turn on your TV these days without seeing renovation and design shows, and hardware stores have everything you need to DIY — so I say stop waiting and start planning!"

    To get there, there are plenty of avenues to explore.

    "The government has recognised the importance of the Australian dream so are constantly offering different incentives for first home buyers to get their foot in the market," Wodecki says.

    "Talk to a home loan specialist about the options available to you. If you don’t qualify now, they can at least assist you with a plan to get where you need to be."

    Here we round up some of the top inner city suburbs where the median price is less than the first home owners grant (FHOG) or concession in each state.**

    Adelaide

    In South Australia, a First Home Owners Grant (FHOG) will provide you with $15,000 if purchasing a new home or build for less than $575k. While this is lower than the value threshold in other states, which is typically around $750k. As they say, it's all relative!

    The top three most affordable suburbs within close proximity to Adelaide CBD each have a median unit price below $300k.

     Most-affordable-city-suburbs-2022-Camden-Park

    This two-bedroom unit in Camden Park recently sold for $250k. Picture: realestate.com.au/sold

    Camden Park and Kurralta Park (both with a median price of $260k) showed the greatest gap between the FHOG threshold and the median unit price.

    Meanwhile Plympton, although geographically in the middle, was slightly higher in price with a median unit price of $282,750.

    Each of these suburbs are nestled just south east of the CBD, less than 9km from the heart of the action.

    If a house is what you're after, new house prices in these areas aren't typically under the FHOG's threshold of $575k, but they can be close (between $640k and $675k median). This means there is still potential to nab a whole house for a steal.

    Brisbane

    Queensland's FHOG offers $15,000 to folks buying a newly built home or a land and building contract under the amount of $750k.

    Brisbane has been booming in recent months, experiencing a significant rise in its median house price. However, there are some surprising suburbs just north of the CBD offering well-priced units.

    Wooloowin, for example, has a median unit price of $385k and is only 9km up the road from Brissie CBD. An older, more established residential area, it's not first call for first home buyers looking to use a FHOG. However, given the prices, it still attracts those looking for an affordable entry point.

    Most-affordable-city-suburbs-2022-Wooloowin

    While first home buyers are nabbing bargains among older units, there is new development happening around Wooloowin. Picture: realestate.com.au/buy

    "Wooloowin is sort of up-and-coming. It borders Clayfield, it has a railway station — the first one past Eagle Junction — so a lot of trains go through there," local unit specialist Judith Crawford from Ray White Clayfield shares.

    "It's quite residential. There's not much commercial and industrial development, but there's a bit of residential development," she adds, noting the luxe Cedar Woods - Greville building at the old Holy Cross convent site.

    However, those looking for a bargain may want to look at buying something a little older.

    "Some of the older 1970s unit complexes are quite popular with younger buyers at the moment. They seem to be buying up older units, which are sturdier and, generally speaking, larger."

    Nearby, Stafford (median $392k) and Gaythorne (median $398k) also show promising affordability.

    Melbourne

    It appears that suburbs north west of Melbourne's CBD are among the most affordable for first home buyers.

    Neighbours Travancore and Flemington, both around 11km from the CBD, have the most affordable median unit prices close to the city. The median in Travancore currently sits around $390k, while Flemington jumps up to $459k.


    Most-affordable-city-suburbs-2022-Travancore

    This two-bedder in Travancore sold for around $300k in December. Picture: realestate.com.au/sold

    Meanwhile, the third most affordable city suburb in Melbourne is Essendon North with a median unit price of $470k.

    Unfortunately new houses in these same suburbs come in well above the threshold. While the median house prices in Flemington and Essendon North come to around $1.2-$1.3m, in Travancore it's a whopping $1.8m.

    For those keen to know, Victorian first home buyers can access a $10,000 FHOG when buying a new property or new build to the value of $750k.

    Perth

    Just 15 minutes north of Perth is a gathering of edgy little suburbs with median unit prices under $300k.

    Wembley, Glendalough and Osborne Park were home to the most affordable apartments near the CBD, based on median unit prices of $275k to $297k.

    Mimma Notaro, the Director of local agency Network Exchange Realty - Subiaco has found success selling in Wembley in recent months, particularly among these lower-cost dwellings.

    "I've sold four units on Cambridge St [in Wembley] in less than six months," she says.

    Most-affordable-city-suburbs-2022-Wembley

    Wembley is home to affordable apartments and The Wembley pub. Picture: realestate.com.au/buy

    Of these sales, Ms Notaro says the sellers were investors, but buyers were first home buyers, interstate relocators and one investor couple.

    Wembley property has a lot of promise with a median unit prices nearly half that of neighbours Subiaco ($550k) and Leederville ($500k).

    If you're a first home buyer looking to buy or build a brand new home, Western Australia's FHOG could offer $10,000 towards the purchase. If the property is south of the 26th Parallel, which, in WA, cuts through the state starting from Shark Bay, the eligible property must be less than $750k. North of the 26th Parallel, the threshold jumps to $1 million. Perth is south of this divider.

    Sydney

    In NSW, the FHOG is $10,000 towards to the purchase price of a newly built home to the value of $600,000 or a land and building contract to the value of $750k.

    Most-affordable-city-suburbs-2022-Campsie

    Campsie is between old and new worlds, with plenty of red-brick dwellings among newer developments around Canterbury Rd. Picture: realestate.com.au/buy

    While there isn't a whole lot of vacant land or inexpensive new houses close to Sydney CBD, there are some excellent priced units only 11km away.

    Campsie in Sydney's inner west is leading the charge with a median unit price of $615k.

    Eastlakes and Rockdale also emerged with reasonable priced homes, with median unit prices of $640k and $650k respectively.

    While each of these suburbs has spots of new development, more affordable dwellings tend to be on the older side. While this excludes them from FHOG eligibility, a $600k unit is still a steal for anyone looking to crack the market for the first time. With each of these suburbs straddling urban and suburban living, they offer the best of affordability, access to public services and infrastructure, idyllic lifestyle perks, plus proximity to the city.

    The top 10 most affordable city suburbs* in Australia

    From a national perspective, Perth and Adelaide come up trumps in the affordability stakes. With smaller populations, urban density does not extend as far out from the city as it does in Sydney, Melbourne or even Brisbane, so you are in with a better chance of finding a property that is both affordable and close to the city.

    That is why we are seeing suburbs of Perth and Adelaide dominate this list.

    To get the best information for first home buyers, we looked at properties with the lowest median sales price in relation to the FHOG property value threshold in that state.

    For example, Camden Park and Kurralta Park in SA are lower-ranked in this list despite having lower median values. This is because SA's FHOG threshold is $575k, versus $750k in WA (and other states on this list).  

    1. Wembley, WA - Median Unit Price: $275,000
    2. Glendalough, WA - Median Unit Price: $281,000
    3. Osborne Park, WA - Median Unit Price: $297,500
    4. Cloverdale, WA - Median Unit Price: $332,500
    5. Highgate, WA - Median Unit Price: $337,500
    6. Camden Park, SA - Median Unit Price: $260,000
    7. Kurralta Park, SA - Median Unit Price: $260,000
    8. Nollamara, WA - Median Unit Price: $340,000
    9. Cannington, WA - Median Unit Price: $345,000
    10. Victoria Park, WA - Median Unit Price: $346,000

    *Data source: REA to confirm most recent number at time of publish.

    *The suburbs featured in this list were those closest to the CBD, with the highest percentage difference between the median house price and the FHOG threshold of its respective state. We haven't included other states and territories because they either don't have a FHOG (ACT) or they have a grant without a price threshold (NT, TAS).

    This article was originally published on realestate.com.au, ‘The most affordable city suburbs for first home buyers in 2022

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  • Disclaimer:

    While such material is published with permission, RAMS is not responsible for its accuracy or completeness.  This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.