Beating the Australian Property Affordability Dilemma

RP Data national residential research director Tim Lawless today released his tips on how buyers struggling to enter the burgeoning property market may still grab a bargain without too much financial pain.

According to Mr Lawless, buyers need to become more realistic about their expectation which means that they may not always be able to buy in the neighborhood, town or city where they currently reside.

Mr Lawless’ report indicates that current property hotspot Adelaide is still by far, the city where the most affordable properties can be found.

“Not only is Adelaide the fastest growing property market in Australia with an annual growth rate of 21.7 per cent, over half of the city’s suburbs have a median house price of under $350,000. 

“Buyers looking at units in the Adelaide market can virtually take their pick with most suburbs still offering affordable units,” Mr Lawless said.

He said that buyers need to become more creative. 

Here he has compiled some ideas to get buyers in gear to beat the affordability crisis:

Follow the Rlippe - If a buyer cannot afford to buy into their suburb of choice, buying into a nearby suburb which is popular is the best way to go. The benefits of buying this way is that price growth will ripple outwards, therefore giving buyers the opportunity to piggyback off the popularity of the nearby suburb.

Get Attached – Attached dwellings such as apartments, units, semi-detached townhouses and terrace houses are typically cheaper than their stand alone counterparts within the same area.  With higher density living becoming somewhat ‘trendy’, these types of properties offer good value for money, and little or no maintenance.

Team Up – A growing trend emerging in Australia is family members and close friends pooling financial resources to acquire properties.  The combination of multiple incomes could be enough to propel buyers into the market.

Buy a Renter – Buying this way means that buyers don’t have to be as fussy about the location because they don’t have to live there.  Mr Lawless advises buyers to look for areas where an already strong rental market exists. By researching rental markets buyers will find suitable properties for sale.

With the latest REIA figures showing that housing affordability is at its worst since the survey began 27 years ago, in today’s market buyers now need 37 per cent of their income to service a mortgage.  

A quick analysis of each capital city reveals a wide variety of suburbs where median house prices are under $350,000, and median unit prices under $300,000.

Based on Mr Lawless’ findings, it is interesting to note that Australia’s most unaffordable city, Sydney, has 143 suburbs were the median house price is less than $350,000.  The vast majority of these suburbs have recorded double-digit annual growth when averaged over 5 years.

Media Inquiries:  Contact Mitch Koper on 041 777 1778 or via email – mitch.koper@rpdata.com