New data highlights affordability hotspots across Australia

Paul Ryan
Paul Ryan

A new resource for first-home buyers, the PropTrack Affordability Hotspot Report was launched today.

While it is no secret cracking into the property market is tough right now, this report can help buyers identify regions that have the most affordable homes in each city and region across the country.

Western Australia and Queensland remain the hotspots for housing affordability

Looking across Australia, the most affordable capital city regions - those with the highest Affordability Index scores - are located in Perth.

Kwinana in the south of Perth is the most affordable capital city region, with an affordability index of 0.79. A median-income Perth household can still afford 20% of homes sold there over the past year, spending up to 25% of their pre-tax income.

Affordability remains a key driver of the strength in the Western Australian market, with Perth having the strongest price growth of any market over the past year.

Across Western Australia, 41% of regions in the state have a significant proportion of homes affordable to those on median incomes, which is 25% of all affordable regions across the country.

Queensland and the Northern Territory also have a larger portion of regions with more favourable affordability conditions compared to the rest of the country. Over a third of all regions where a median income household can afford 20% of home sales are located in Queensland.

Regional areas continue to feature more favourable affordability, despite rapid price increases since the pandemic.

Among regional areas, outback regions top the list for affordability. While remote, these regions continue to have high accessibility for households with median incomes, with well above two-thirds of homes considered affordable.

Sydney and Melbourne continue to have challenging affordability conditions, but there are regions where buyers will have more luck cracking into the market.

Just 3.8% of home sales across Sydney were affordable for median-income Sydney households over the past year.

But more affordable parts of Sydney can found to the west and south-west of the city. These are the regions where first-home buyers will have the most success when looking to crack into the most expensive housing market in the country.

The PropTrack Housing Affordability Index records Parramatta as the most affordable region in Sydney, despite a median-income Sydney household only being able to afford 9% of home sales there.

Melbourne is unusual in that its inner city is the most affordable part of the city. This is driven by a large number of units, which allows well-located living at affordable price points. A median-income Melbourne household can afford 24% of homes sold in the inner city.

For first-home buyers, particularly those looking to buy a house, the west of the city holds the best affordability. While in many of these regions few homes are affordable for those on median incomes or lower, a larger share of homes are affordable across the income distribution.

Brisbane continues to feature favourable affordability, particularly to the south and west

Three of the most affordable areas in Brisbane are in the southern Logan – Beaudesert broader region – with a median-income Brisbane household able to afford one in five homes in the most affordable Springwood – Kingston region.

The west of Brisbane, particularly Ipswich, also features favourable affordability. Ipswich Inner and Ipswich Hinterland both remain promising locations for first-home buyers looking to buy a house.

With affordability a key driver of demand in Queensland, it is no surprise these parts of Brisbane have seen double-digit price growth over the past year.

How do we identify affordability hotspots?

The PropTrack Affordability Hotspots Report uses the innovative PropTrack Housing Affordability Index, calculated for each ABS Statistical Area level 3 region, to rank the housing affordability of all parts of Australia.

The Index measures what proportion of homes sold from July 2023 to March 2024 are affordable to households across the income distribution, within their greater capital city region, when spending 25% of their pre-tax income on mortgage repayments.

With affordability at record-lows, highlighting where first-home buyers can crack into the market is more valuable than ever

The results quantify the challenging state of housing affordability across the country. Very few regions remain affordable to households earning median incomes (or lower). This highlights the role existing wealth plays in entering home ownership, given the high level of prices across the country.

But the full report identifies regions in every part of the country where buyers are most likely to gain a foothold in the market.

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