Homes & Relocation Detail
Affordable abodes
Andrew Collier surveys the most affordable property hotspots
This year has seen the Australian housing market finally start to level out after the price booms of the last few years. In the first quarter of this year, prices in some areas began to fall. There are exceptions to this rule, though, which is not surprising considering the size of Australia and its
diversity of cities and towns.
In March 2008, the median house price for Australia was AUS$458,488. The biggest drops were in Melbourne and Canberra, which saw prices fall by 8.4 and 6.8 per cent respectively over the first quarter of 2008. The highest rises took place in Adelaide and Darwin, which rose by 2.0 and 1.8 per cent respectively.
So, with all this information the question to ask is, just where are the affordable areas in Australia?
According to the Demographia survey, published for the third quarter of 2007, all of the Australian state/territory capitals fall into the category of 'Severely Unaffordable' with the notable exception of Darwin.
Demographia produces these results by dividing the median house price by the median household income.
State by state
New South Wales has some of the most unaffordable cities in Australia, according to Demographia. Sydney, Newcastle and Wollongong all make the list of severely unaffordable places.
The reason for the inclusion of Newcastle and Wollongong on the list might be that both of these cities have been suffering from a rental shortage over the last few months. Both cities have large university campuses and a high number of students looking for rental accommodation. House price rises, which are finally slowing now, have also driven up rental prices, which have in turn reduced the number of property vacancies to below the 1 per cent mark. The slow down in housing prices will hopefully begin to address this problem.
Western Australia, long a favourite destination for migrating Brits, has not followed the NSW pattern. Last year, the property market slumped dramatically after population growth and significant house building in the Perth area had seen prices soar. This year, prices have levelled out. However, the economy and population are still continuing to grow.
Victoria saw some of the highest falls in house prices for the first quarter of this year. However, Melbourne has now got the fastest expanding urban area, as people move from Sydney where prices are higher.
South Australia's two interest rates rises this year have ensured that the housing market has stabilised, despite another rise in the median prices. Economic growth in the regional cities and towns has continued, especially those with a mining connection such as Port Pirie and Port Augusta.
In the Northern Territory, Darwin's house prices have continued to rise.
Figures show increases in locations across the state, including Palmerston and Alice Springs, although the highest increases were in the central areas of Darwin itself.
The reason for the increase in prices is, according to the Real Estate Institute of Australia, "Spurred on by sustained economic and population growth."
Queensland's property market is slowing down after significant growth last year. The state has seven towns and cities on the list of severely unaffordable locations. Rockhampton and the Gold and Sunshine Coasts all appear higher than the capital Brisbane. The reason for the increase in these areas is the continued population increases as more and more people relocate to the East Coast.
Affordability
Many factors – including house prices in the first quarter of this year, population increases and improving infrastructure – are all factors in determining the whereabouts of the most affordable areas in Australia.
In terms of house prices, Adelaide is still the cheapest mainland state capital, with a median price of AUS$362,050, although it saw an increase of 2.0 per cent this year. South Australia comes out as the most affordable state as prices are lower than other states and only just beginning to rise.
Population increases in Mount Gambier and other regional centres will spur further price increases.
Sydney is the most expensive capital city, with a median house price of AUS$554,000. However, with prices starting to even out, this gives other places a chance to 'catch up'. However, New South Wales is still the least affordable state as its regional cities are showing price increases and the rental market is buckling under the demand for vacancies.
There is a significant difference between Sydney and the next least affordable city, Perth, with its median price of AUS$460,000. Canberra and Melbourne, with median prices of AUS$445,000 and AUS$432,500 respectively, all dropped in price in the first quarter of this year. Darwin and Brisbane are next and their median prices of AUS$420,000 and AUS$416,500 respectively are higher than in 2007.
For more information on Australian house prices, go to:
www.reia.com
Related articles:
Aussie property prices
Buying and selling property in Australia
Register for your FREE emigration starter pack