John McGrath – Cheapest suburbs for family homes

Affordability is a key challenge for many buyers today, due to ongoing price rises in most markets and higher interest rates making home loans difficult to get and more expensive to service.

We can see from the property data that buyers are gravitating to more affordable homes now, with the most price growth occurring in the cheaper price brackets of most markets these days.

At a citywide level, the cities experiencing the most price growth over the past year have been the historically more affordable mid-sized capitals of Brisbane, Perth and Adelaide. Part of the reason for this is Australians’ increased willingness to move or invest interstate following the pandemic.

The COVID era prompted many people to reassess their lives. Some took the opportunity to work remotely on a permanent basis, which opened up the prospect of moving wherever they wanted – typically more affordable lifestyle areas on the coast.

Strong jobs growth in states like Queensland and Western Australia has also encouraged other workers to relocate interstate and take advantage of more affordable housing.

Investors are also broadening their search after getting used to video inspections and electronic conveyancing available during the pandemic. Investors are more confident to buy sight unseen, and as a result, they are prioritising markets offering affordability, better yields and superior capital growth prospects over the previous default choice of buying close to home in an area that they already know.