Landing a foot on the Australian property ladder for an affordable price has been getting easier for lower- and middle-income buyers.
Recent interest rate cuts and falls in home prices have opened up a range of suburbs once out of reach for buyers on a tight budget, with some capital city suburbs now accessible to home seekers earning as little as $25,000 a year, new research showed.
Housing experts said the improvement has opened up the market in a way not seen in years.
“If you look at the last two years, there probably hasn’t been a better time to be buying in most areas,” buyer’s advocate James Nihill of Patrick Leo said.
“Interest rates have never been this low and there is not a lot of competition for property … a lot more buyers were shut-out of the market in 2017.”
Analysis of mortgage and CoreLogic data showed the biggest improvements were in Sydney and Melbourne largely due to recent falls in prices.
Harbour City property values plummeted by an average of almost 15 per cent over the past two years and Melbourne values dropped about 11 per cent.
Lenders are also now offering interest rates as low as 3.5 per cent, well below the 5 per cent rates typically being offered two years ago.
This made nearly twice as many Sydney suburbs affordable for a buyer on an income of $70,000 a year — the typical wages of a teacher or nurse — while Melbourne buyers on this income could purchase in a third more suburbs.
There was also an expanded range of Adelaide, Brisbane and Perth suburbs offering prices affordable for teachers, nurses or other lower-income earners, the analysis showed.
The research used mortgage and sales data to reveal how much a typical home buyer would need to earn to comfortably purchase property in every capital city suburb.
It assumed the buyer used a 20 per cent deposit and current interest rates to buy a property at the local median price and wanted to avoid spending more than a third of their income on repayments — a situation commonly known as housing stress.
BRISBANE
Rampant unit construction has helped moderate apartment prices within inner Brisbane areas.
The average apartment in suburbs Milton, Herston and Wooloowin could now be snapped up on an income of $45,000 to $55,000 after requiring more than $75,000 two years ago.
Those earning about $70,000 a year had the additional option of being able to afford an average unit purchase in Woolloongabba, Camp Hill, Murarrie, Spring Hill, Hamilton and Hawthorne.
CoreLogic analyst Cameron Kusher said Brisbane’s glut of new apartment stock was among the largest in the country and was still taking time to get “absorbed” by buyers.
However, the cheapest real estate remained concentrated in southern Brisbane and was spread across suburbs in the Logan area, including Beenleigh, Eagleby, Mount Warren Park and Loganlea.