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East Brunswick was one of the more affordable Melburnian suburbs for first home buyers, according to Canstar’s latest report. Image: Canva.
  • Mostly houses, but includes three suburbs where unit are top buys
  • Sydney was the worst ranked for affordability, followed by Melbourne
  • The report considers various factors specifically for first home buyers

Canstar recently released The Australian First Home Buyer Report, a report that ranks the eight capital cities and six regional states and territories from most affordable to least affordable.

The report also found which suburbs are more suited to first home buyers.

“Saving for a deposit on a median-priced home can be disheartening for first-time buyers, especially when they realise it may take them close to a decade to achieve their goal,” said Canstar editor at large, Effie Zahos.

“The Bright Starters Report is unique as it is based on the premise that first-timers don’t achieve their dream home initially. Instead, they buy at the affordable end of the market, partner-up, and put down a 10 percent deposit on an entry-level home with the view of working their way up from there.”

What’s happening now?

The report comes as the country waits with bated breath regarding interest rates, and as earlier reported by The Property Tribune, more first home buyers are relying on government grants.

A survey conducted by Great Southern Bank (formerly CUA) found that 72% of first home buyers want to use the government scheme support – compared to 54% who purchased during the past five years.

54% of homeowners surveyed said they had made use of government schemes and financial support, with only 15% saying they did not.

The remaining 31% said they had not yet tapped into available support, but would not rule out doing so in the future.

Housing affordability was also a hot button topic up until the election was called, after which it went on the back burner. The subject was brought up again at the recent Liberal and Labor party election campaign launches yesterday, but maybe fleetingly.

Research from the Property Council of Australia released in March found almost 70 per cent of voters fear younger people will never be able to buy a home in this country.

Data also revealed that almost 90 per cent of people trying to enter the housing market said housing affordability was among their chief concerns when heading to the polls in the upcoming election.

“Our research shows 4 out of every 5 aspiring homeowners actually believe the dream of home ownership is unachievable, which you’d have to say is incredibly disheartening,” said Property Council Chief Executive Ken Morrison.

“It’s no wonder more than half of 18–34-year olds say it will be an important issue for them in deciding their vote, while another quarter felt it was one of the most important issues coming into the election.

“Older voters are also very concerned. Our data shows 82 per cent of over 55-year olds say while they believe home ownership is crucial to financial security, 70 per cent of them also believe that dream is fading for future generations,” he said.

The Canstar report

Hotspotting property expert and co-producer of the Bright Starters Report, Terry Ryder, said, “The Report found a dual-income couple can save a 10 per cent deposit in under two and a half years in eight of the 14 market jurisdictions across Australia. This means if you’re smart about where you buy, you could hold the keys to your first home in less time than you think.”

“It’s not just about affordability for first home buyers – they also want desirability and the knowledge that their home will grow in value over time. This Report also highlights 107 suburbs around the country that offer the full package – affordable dwellings, amenities and lifestyle and prospects for growth.

Affordability rankings were determined by setting the price based on the lower quartile or 25th percentile sales price for houses in each location. These prices were sourced from Dashdot and are based on data published by CoreLogic in January 2022 (meaning December 2021 data).

Canstar then whittles the numbers down using two metrics: time to save and repayments as a percentage of income. Both metrics had equal weighting.

The suburbs were also chosen from the 25th percentile for sales price and allowed for a variation of up to 10%. For a town or suburb to be eligible, the median price had to be lower than the aforementioned figure. For example, if the lower quartile sales price was $255,000 then the median price needed to be $280,500 or less for a location to
be included.

Canstar then applied the following five parameters:

  1. Sales volumes, data from domain.com.au,
  2. Quarterly price growth, data from CoreLogic and smartpropertyinvestment.com.au,
  3. Vacancy rates, data from SQM Research
  4. Infrastructure, data from multiple sources, and
  5. Proximity to work and amenities, data from multiple sources.

The rankings

It comes as no surprise Sydney came stone dead last, followed by Melbourne.

Of the top five, Perth was the only capital city to make it amongst a field of regional candidates.

  1. Regional WA,
  2. Regional SA,
  3. Perth,
  4. Regional Queensland,
  5. Regional Tasmania,
  6. Regional Victoria,
  7. Regional NSW,
  8. Brisbane,
  9. Darwin,
  10. Adelaide,
  11. Hobart,
  12. Canberra,
  13. Melbourne,
  14. Sydney.

Best Melbourne suburbs for first home buyers on a 20% deposit

 

Suburb Median price 1-year growth Median rent Initial Outlay Time to save (single income) Time to save (dual income) Monthly repayments
Broadmeadows $580,000 5% $360 $117,560 12 yrs 5 yrs 7 mths $1,986
Brunswick East (U) $585,000 12% $410 $118,572 12 yrs 2 mths 5 yrs 8 mths $2,004
Caroline Springs $680,000 5% $420 $156,924 16 yrs 2 mths 7 yrs 6 mths $2,329
Cheltenham (U) $675,000 11% $430 $154,567 15 yrs 11 mths 7 yrs 4 mths $2,312
Cranbourne $590,000 18% $375 $119,584 12 yrs 3 mths 5 yrs 8 mths $2,021
Dallas $505,000 10% $340 $102,385 10 yrs 3 mths 4 yrs 10 mths $1,730
Epping $630,000 6% $400 $134,250 13 yrs 10 mths 6 yrs 5 mths $2,158
Narre Warren $670,000 13% $405 $152,230 15 yrs 8 mths 7 yrs 3 mths $2,295
Preston (U) $630,000 26% $390 $134,250 13 yrs 10 mths 6 yrs 5 mths $2,158
St Albans $660,000 10% $360 $147,615 15 yrs 3 mths 7 yrs $2,260

Best Melbourne suburbs for first home buyers on a 10% deposit

Suburb Median price 1-year growth Median rent Initial outlay Time to save (single income) Time to save (dual income) Monthly repayments
Broadmeadows $580,000 5% $360 $59,560 5 yrs 9 mths 2 yrs 9 mths $2,360
Brunswick East (U) $585,000 12% $410 $60,072 5 yrs 9 mths 2 yrs 10 mths $2,380
Caroline Springs $680,000 5% $420 $88,924 8 yrs 6 mths 4 yrs 2 mths $2,767
Cheltenham (U) $675,000 11% $430 $87,067 8 yrs 3 mths 4 yrs 1 mth $2,747
Cranbourne $590,000 18% $375 $60,584 5 yrs 10 mths 2 yrs 10 mths $2,401
Dallas $505,000 10% $340 $51,885 4 yrs 11 mths 2 yrs 5 mths $2,044
Epping $630,000 6% $400 $71,250 6 yrs 10 mths 3 yrs 4 mths $2,564
Narre Warren $670,000 13% $405 $85,230 8 yrs 1 mth 4 yrs $2,726
Preston (U) $630,000 26% $390 $71,250 6 yrs 10 mths 3 yrs 4 mths $2,564
St Albans $660,000 10% $360 $81,615 7 yrs 10 mths 3 yrs 10 mths $2,686

~~

Top 10 suburbs for first home buyers in Melbourne

  1. Broadmeadows
  2. Brunswick East (Units)
  3. Caroline Springs
  4. Cheltenham (Units)
  5. Cranbourne
  6. Dallas
  7. Epping
  8. Narre Warren
  9. Preston (U)
  10. St Albans
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