Home prices in Australia have been rising for years now, with many homebuyers being priced out of the market in places like Sydney and Melbourne where the average home price is $852,000 and $641,200 respectively. If demand continues to exceed supply as the populations of Aussie urban hotspots swell, experts predict that property will be virtually unaffordable in the future. If the next two decades see the same remarkable increases of the last 20 years, by 2037 it will cost $6 million to enter the market in both Sydney and Melbourne.
While this growth can only last for so long, with buyers having to pay 8, 10, and 12 times their annual income for a home, in some cities at least, demand is still dwarfing supply. This means the bubble isn’t going to burst tomorrow. This is partially due to the Australian real estate market’s unique characteristics – the persistent low interest rates, interest from international investors, and restrictions on development in some areas.
When it does burst, property values will drop, possibly dramatically in the cities with highly inflated prices. This could spell trouble for you if you want to sell your home before the market rises again, as you may not be able to get the price you purchased it for.
What if you want to buy a home right now? Where are the best places in Australia to purchase a first home? Where can you find that perfect balance of current affordability, a great quality of life and ample job opportunities – and feel secure that you aren’t paying a hyperinflated price for your home?
In Western Australia, the economy has been growing at a much slower rate than New South Wales, Queensland, and Victoria. This has pushed housing and rental rates down, making Perth one of the most affordable cities in Australia. While some suburbs, such as Peppermint Grove, experienced fast growth in 2016, for the most part 2017 is expected to provide plenty of opportunities for buyers.
Perth is also an excellent place to call home – it was rated as the 21st best city to live in the world in terms of quality of life, safety, and health and environmental standards. The area is known for its beautiful beaches, award-winning wine regions, and ultra low rates of crime and homelessness. The capital of WA and a bustling city of two million, there are plenty of job opportunities in education, healthcare, retail, and the service sector to accommodate the large population.
Darwin, like Perth, has experienced something of a slowdown in response to the flattening mining industry. This means that, right now, the housing prices are at a low, making this a great city to invest in. While the capital of the Northern Territory is far from other major cities, it is close to Australia’s Southeast Asian neighbours, which is why Darwin is a wonderfully multicultural city. You’ve got lovely beaches, plenty of sunshine, low unemployment, and outdoor activities abound. The downsides are, however, high food prices and Darwin isn’t as rich in the arts as cities like Melbourne and Sydney.
One of the best places to buy a first home in Australia isn’t on the mainland at all, but on Tasmania. Hobart, traditionally has had a weaker economy than other cities, but recently the city has been growing. Also, excellent first-home buyer grants have boosted industries like construction and tourism, fuelling the economy and helping to keep prices dramatically lower than other cities.
Hobart is a top pick in terms of affordability and if you want a property where your home value is likely to go up, not down. It’s also an ideal spot for a safe, laid-back way of life and for raising a family. The city boasts good schools and plenty of outdoor and cultural activities.
Not far from Sydney’s CBD, Liverpool is a suburb where you can buy a home for an affordable price, while also being close to great amenities, employment, and transportation. Many real estate experts recommend opting for the inner-city suburbs around Sydney if you are interested in capital growth and access to everything that Sydney provides. Liverpool, as well as Casula, Blacktown and St Marys are all good picks.
Outside of Adelaide in South Australia, you will find this gem. Prices are rising, but new homebuyers can still find some excellent deals. The area is known for being safe, clean, and offers a relaxing atmosphere, although a limited nightlife. Close to Adelaide, job prospects are strong, with many people professionals and students living in the area.
With fast-rising housing prices, it can be a challenge deciding where exactly to purchase your first home in Australia. Still, there are so many excellent opportunities, from the Northwest Territory to Tasmania. You may not be able to buy in Sydney, but that doesn’t mean you can’t get a great deal just outside of the city, or venture to the growing, thriving other corners the country – where you’ll enjoy beautiful beaches and outdoor activities, and escape the high prices and the crowds!