By John McGrath

Affordability has been a hot topic of late so a new report from CoreLogic RP Data is quite timely. It presents the most affordable suburbs in every capital city – which is interesting reading but let’s be honest, they might not be suburbs on the top of your wishlist particularly as many of them are on the outskirts. 

In fact, in the case of NSW, 4 out of the top 5 cheapest suburbs are actually on the Central Coast, which is increasingly being seen as an extension of metro Sydney and becoming a popular choice for first home buyers willing to commute. 

However, these lists do remind us that there are affordable locations in or very close to every capital city, so check them out further below. 

Here’s another angle on the whole affordability debate. Prices aren’t going to change (at least not much) but there are things you can do yourself to improve your own ‘affordability’.

The best possible thing you can do is take advantage of historically low interest rates. The interest on your home mortgage will always be your greatest expense as a first home owner, so low interest rates can make a huge difference. For further security and sleep-at-night comfort, lock in those rates with a fixed loan for 3-5 years

Perhaps consider a second job. Think outside the square about what else you could do – maybe from home, to pick up some extra cash to contribute to your deposit. Alternatively, if you feel you deserve a pay rise at work, ask for one!        

Just be prepared to explain why you deserve it  

Compromise on property type

  • Consider an apartment, townhouse or villa over a house; and

  • If you really want a house, consider buying an original home that you can renovate over time  

 

Talk to a broker who can shop around for you, as lenders have vastly different criteria for assessing borrowing power – in some cases, the amount lenders are willing to give to the same candidate can vary by tens of thousands of dollars 

Compromise on your desired location

  • Look at areas immediately surrounding your target suburb – you might be surprised how much less you’ll pay just next door; and 
  • Consider cheaper suburbs in the same city that offer a similar lifestyle. For example, if you enjoy living close to the beach, do some research on other beach areas. For example, compare these median prices for one bedroom apartments in these popular Sydney beach suburbs: 

         - Bondi $740,000
         - Manly $656,500 
         - Dee Why $550,000
         - Cronulla $480,000

Source: realestate.com.au

What is probably most notable here is the $100,000-plus difference between Manly and Dee Why. These are both Northern Beaches suburbs with their own beaches and established shopping and dining precincts and they’re only 10-15 minutes apart by car. 

Cheapest capital city suburbs (Houses)

New South  Wales

Spencer (Gosford area) $342,372 

San Remo (Wyong area) $371,669 

Mannering Park (Wyong area) $390,821  

Victoria

Melton (Melton area) $265,335

Melton South (Melton area) $280,966

Millgrove (Yarra Ranges) $294,664

Queensland

Russell Island (Redland area) $225,655 

Dinmore (Ipswich area) $227,512

Leichhardt (Ipswich area) $227,658

South Australia

Davoren Park (Playford area) $179,954

Elizabeth North (Playford area) $180,191

Smithfield Plains (Playford area) $192,237

Western Australia

Medina (Kwinana area) $276,935

Calista (Kwinana area) $308,061 

Parmelia (Kwinana area) $309,380

Tasmania

Herdsmans Cove (Brighton area) $137,724

Gagebrook (Brighton area) $140,650

Clarendon Vale (Clarence area) $154,642 

Northern Territory

Moulden (Palmerston area) $465,257

Gray (Palmerston area) $492,119

Woodroffe (Palmerston area) $511,911

ACT

Charnwood (ACT) $400,119

Ngunnawal (ACT) $435,859

Holt (ACT) $442,124

*Source: CoreLogic RP Data – only suburbs with at least 10 sales over the 12 months to January 2016 are included