Australian real estate: Where the new first-home buyer-friendly suburbs are in your state

A change of government, cooling home prices and improved scheme thresholds means first-home buyers will have more opportunities in the new financial year.

From July 1, the new Labor Government has pledged to carry on the Coalition’s property promise of higher price caps and more placements for the First Home Guarantee Scheme (formerly known as the First Home Loan Deposit Scheme).

The scheme will see 55,000 first-home buyers purchase a property with a deposit of just 5 per cent, with the government guaranteeing the remaining 15 per cent to reach the lenders’ preferred 20 per cent. Labor added an additional 10,000 spots for regional buyers).

Purchase thresholds will jump by as much as $250,000, allowing for more in the house hunting budget.

PropTrack, the data arm behind realestate.com.au, has unearthed the first-home buyer friendly suburbs across the most populous states — where affordability has been the most impacted during the post-pandemic price boom.

The research revealed where median dwelling values are under the new thresholds including 2439 suburbs for units and 2827 for houses.

“The proportion of suburbs where the median house price is within the price cap limit will almost triple from a low base in Hobart, and almost double in Adelaide, where the share of suburbs now with houses within the $600,000 price cap will surge to 138,” said senior economist with PropTrack, Eleanor Creagh.

When it comes to the total number of suburbs meeting the new caps in the capitals, the most have been added in Sydney and Adelaide.

“The share of suburbs where units were within the prior price caps was unsurprisingly already a lot higher, but the raised caps will still see a lot more units now eligible, giving first-home buyers a lot more choice,” Ms Creagh said, adding that the majority of suburbs have been added in Melbourne, Sydney and Canberra.

“This means, while first-home buyers will certainly have more houses to choose from, when it comes to units, there will be a lot more choice.

As a result, it’s likely this will add to unit demand,” she explained.

In Sydney (including Newcastle, Lake Macquarie and Illawarra per the FHGS) PropTrack’s figures show there are still 559 suburbs where the median for units sits below the new $900,000 threshold and 283 suburbs where house medians are under the cap.

For regional NSW, where home values in some areas have increased by more than 50 per cent since the pandemic hit, the first-home buyer price cap will move from $600,000 to $750,000.

There are now 578 suburbs with house medians below that value and 303 locations for units.

Regional Queensland, which saw an influx of internal migration during lockdowns, has the most suburbs valued under the ‘rest of state’ threshold of $550,000.

There are 918 spots that would meet price caps (254 for units and 664 for houses).

In Brisbane (including the Gold Coast and Sunshine Coast) there are 622 areas where prices are under the threshold with 383 for units and 239 for houses.

While thousands of suburbs fall into the affordable basket, there is no indication they will prove to be profitable growth areas or provide everything a first-home buyer would need. Comparison site Canstar and hotspotting.com.au compiled the Bright Starters Report identifying 107 affordable locations for first-home buyers across both regional and capital city markets.

As well as having medians below the FHGS caps, each suburb listed has potential for price growth and positively fits into five key metrics; sales volumes, quarterly price growth, vacancy rates, infrastructure and proximity to work and amenities.

Effie Zahos, Canstar’s editor-at-large said saving for a deposit on a median-priced home in some neighbourhoods can be “disheartening” for first-time buyers, especially when they realise it could take them close to a decade to achieve their goal.

“The Bright Starters Report is unique as it is based on the premise that first-timers don’t achieve their dream home initially,” she said.

“Instead, they buy at the affordable end of the market, partner-up, and put down a 10 per cent deposit on an entry-level home with the view of working their way up from there.”

Zahos added that the report found in 10 of the 14 jurisdictions, income-to-loan repayment ratios didn’t exceed 17 per cent for a dual income couple with a 10 per cent deposit, meaning there’s still room in the income to absorb rising interest rates.

Terry Ryder, director of Hotspotting and co-producer of the Bright Starters Report, said a dual-income couple could save a 10 per cent deposit in under two and a half years in eight of the 14 markets mentioned in the analysis.

“This means if you’re smart about where you buy, you could hold the keys to your first home in less time than you think,” he explained.

See the first-home buyer friendly suburbs by city and state below, according to the Bright Starter Report with medians by realestate.com.au;

SYDNEY

In metropolitan Sydney (which also includes Newcastle, Lake Macquarie and Illawarra) the FHLDS increase will be from $800,000 up to $900,000.

Bradbury – $752,295

Doonside – $820,482

Hillsdale (units) – $633,676

NSW

Across regional areas of the state the cap will change from $600,000 to $750,000 in the new financial year.

Armidale – $452,629

Lavington – $412,033

Tweed Heads West (units) $402,010

MELBOURNE

In the Victorian capital (including Geelong) the threshold moves from $700,000 to $800,000 on July 1.

Broadmeadows – $583,265

Brunswick East (units) – $583,239

Caroline Springs – $711,178

VICTORIA

The rest of the state will see a rise of the cap from $500,000 to $650,000.

Bairnsdale – $410,257

California Gully – $432,583

Sebastopol – $435,433

BRISBANE

Incorporating the Gold Coast and the Sunshine Coast, the metropolitan cap will be $700,000, up $100,000 from the previous threshold.

Bundamba – $384,749

Caboolture – $500,632

Annerley (units) $494,323

QUEENSLAND

The greater state will have a price cap for the loan scheme sitting at $550,000.

Bundaberg East – $340,098

Kin Kora – $325,666

Nerang (units) – $465,000

CANBERRA

The nation’s capital will see the largest jump in the threshold with the limit rising $250,000 to $750,000.

Dickson (units) – $505,000

Isabella Plains – $796,000

Ngunnawal – $757,000

HOBART

The capital of the Apple Isle has a $600,000 price cap up from $500,000 for first-home buyer properties.

Berriedale – $591,803

Claremont – $552,870

Primrose Sands – $460,308

TASMANIA

In the remainder of the island state homes will need to be purchased for less than $450,000.

George Town – $335,421

Somerset – $408,805

Upper Burnie – $367,326

ADELAIDE

For the capital city the threshold will sit at $600,000, which is a $100,000 change from the previous financial year.

Brahma Lodge – $377,453

Christies Beach – $499,249

Elizabeth East – $318,483

SOUTH AUSTRALIA

For the rest of the state the loan scheme cap will be $450,000.

Berri – $243,588

Port Augusta – $191,060

Whyalla Norrie – $165,880

From realestate.com.au

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