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Booming yet affordable: The sub $750k suburbs... ideal for SMSF investment

Daniel Butkovich

8 May 2024,


Property prices have climbed higher in most of the capitals over the past year, and in a handful of suburbs, homes are still affordable despite huge price rises.

PropTrack data has revealed the budget-friendly capital city suburbs — all with median property values under $750,000 — where prices have gone up the most in the past 12 months.


Despite the huge increases over the past year, typical homes in these affordable pockets cost less than Australia’s median home value – which reached a record high last month.

About half the suburbs on the list are priced under $600,000 – a price point that would be attractive to first-home buyers and investors alike.


PropTrack economist Eleanor Creagh said the significant reduction in borrowing capacities as a result of rising interest rates and the deterioration in housing affordability over recent years had pushed buyers to suburbs where homes are cheaper.

“Lower value homes are recording stronger growth than more expensive homes across the combined capital cities,” she said.

“This is a direct contrast to the same time last year when the upper end was driving the recovery.”

The affordable suburbs with the biggest price rises were mostly found in pockets of Perth, Adelaide and Brisbane, with growth rates higher than 30% in some areas.

This surge in values reflects tightness in these markets amid heightened competition, Ms Creagh said.

In Riverview, a suburb of Ipswich, the value of a typical house has increased by almost $127,000 over the past year.


“The smaller capital city markets, Perth, Adelaide, and Brisbane are likely to maintain their outperformance despite growth slowing as constrained stock levels are intensifying competition amid strong buyer demand.”

Meanwhile, the fastest-growing affordable Sydney suburbs had growth rates in the double digits, while the top-performers in Melbourne, Hobart, Darwin and Canberra had lower growth rates.


Budget-friendly suburbs where prices surged the most

PropTrack data shows that in the top five suburbs in each city with houses and unit median values under $750,000, prices grew faster than the city overall, in some cases by a significant margin.

Most of the high-growth affordable suburbs are located in the outer suburbs of the capitals, although booming suburbs for units could be found a little closer to the CBD.

The data uses PropTrack's automated valuation model (AVM) to determine a suburb's median house or unit value.


Sydney







Source: PropTrack. Suburbs ranked by % YoY change in median value for houses and units.


Suburb

Region


(SA4)

Property type

 Median value (AVM)

YoY change (%)

YoY change ($)

1

Whalan

Sydney - Blacktown

House

$743,235

12.0%

$79,591

2

Blackett

Sydney - Blacktown

House

$734,067

11.9%

$77,877

3

Watanobbi

Central Coast

House

$728,309

11.7%

$76,240

4

Emerton

Sydney - Blacktown

House

$741,853

11.5%

$76,335

5

Willmot

Sydney - Blacktown

House

$720,436

11.3%

$72,916

1

Camden

Sydney - Outer South West

Unit

$643,060

13.3%

$75,450

2

Glenfield

Sydney - Outer South West

Unit

$641,963

11.3%

$65,133

3

Macquarie Fields

Sydney - Outer South West

Unit

$604,449

9.9%

$54,325

4

Mount Pritchard

Sydney - South West

Unit

$687,262

9.8%

$61,082

5

Emerton

Sydney - Blacktown

Unit

$536,440

9.6%

$47,016








All of the suburbs in the Greater Sydney region with a median house value under $750,000 are found in the outer west, Blacktown or the Central Coast, reflecting how hard it is to find an affordable house close to the CBD of Australia’s most expensive city.

But of these affordable suburbs, values jumped the most in a small pocket of Blacktown, where despite a 10-12% uplift in prices, a typical home can still be purchased for less than $750,000.

Blackett is one of the most affordable suburbs in Sydney, and house prices there have lifted about 12% over the past year.


In suburbs like Whalan, Blackett and Emerton, typical house values have climbed by between $70,000 and $80,000 in the past year.

The affordability of the Blacktown region and upgraded infrastructure in the area had drawn more buyers from other parts of Sydney, particularly Parramatta, with increased competition driving prices higher, according to real estate agent Peter Diamantidis of Ray White.

“There’s not really many places under $750,000 you can buy in Sydney, so people are pushed out here.”

He said most buyers in the area were purchasing their first home, and some had plans to convert it to an investment property further down the track.

Meanwhile, unit values have gone up the most in affordable suburbs in the south west like Mount Pritchard, Macquarie Fields and Camden.


Melbourne







Source: PropTrack. Suburbs ranked by % YoY change in median value for houses and units.


Suburb

Region (SA4)

Property

Median value (AVM)

YoY change (%)

YoY change ($)

1

Junction Village

Melbourne - South East

House

$694,154

6.0%

$39,347

2

Coolaroo

Melbourne - North West

House

$514,822

3.6%

$17,671

3

Meadow Heights

Melbourne - North West

House

$564,271

3.2%

$17,636

4

Doveton

Melbourne - South East

House

$593,328

3.1%

$18,004

5

Hallam

Melbourne - South East

House

$722,183

3.1%

$21,540

1

Brookfield

Melbourne - West

Unit

$419,349

7.3%

$28,532

2

Wantirna South

Melbourne - Outer East

Unit

$616,006

7.1%

$40,702

3

Carlton North

Melbourne - Inner

Unit

$673,278

6.0%

$38,338

4

Upper Ferntree Gully

Melbourne - Outer East

Unit

$627,123

5.9%

$34,833

5

Taylors Hill

Melbourne - West

Unit

$516,637

5.7%

$27,746

The top performing affordable Melbourne suburbs don't have as high annual growth as in some of the other capitals, given Melbourne's price recovery has lagged behind over the past year.

The city's median home value is $10,000 higher than a year ago, but in some suburbs property values have risen up to four times that amount, despite still being priced under $750,000.

A two-bedroom unit in this building in Wantirna South recently sold for $450,000, with values in the suburb rising about 7% in the past year.

The top-performing affordable suburbs for units tended to have higher growth rates, reflecting a trend towards higher growth in unit prices seen across most of the capitals, but particularly in Melbourne.


Brisbane







Source: PropTrack. Suburbs ranked by % YoY change in median value for houses and units.


Suburb

Region


(SA4)

Property

 Median value (AVM)

YoY change (%)

YoY change ($)

1

Riverview

Ipswich

House

$508,533

33.1%

$126,596

2

Logan Central

Logan - Beaudesert

House

$581,161

31.6%

$139,567

3

Kingston

Logan - Beaudesert

House

$586,722

30.3%

$136,597

4

Woodridge

Logan - Beaudesert

House

$570,657

30.1%

$131,970

5

Dinmore

Ipswich

House

$486,829

29.7%

$111,348

1

Woodridge

Logan - Beaudesert

Unit

$335,018

39.2%

$94,408

2

Kingston

Logan - Beaudesert

Unit

$438,210

38.9%

$122,634

3

Inala

Ipswich

Unit

$611,891

38.0%

$168,509

4

Waterford West

Logan - Beaudesert

Unit

$379,684

37.4%

$103,348

5

North Booval

Ipswich

Unit

$407,442

37.3%

$110,791

Affordable suburbs have had the strongest growth in Brisbane by far, with all the top 20 suburbs for house price growth priced well under $750,000.

Suburbs with the highest annual growth are located on the city's western and southern fringes around Ipswich and Logan.

Values in these suburbs have grown by up to 39% over the past year – about three times as fast as Brisbane overall.


Ipswich has the seventh highest price growth of all regions of Australia, while the Logan - Beaudesert region has the ninth highest growth.

Real estate agent Teza Fruzande of McGrath said rising prices had pushed more buyers towards the affordable end of the market.

“At the moment units are on fire and I feel like the enquiry level on houses has dropped a little because everyone’s gone towards units,” he said.


While price growth was driven by a lack of homes on the market amid strong demand, Mr Fruzande said more homes would be listed for sale as more owners realise how much the value of their homes have increased.

“When the owners find out there is an extra $100,000 they can get, they're more motivated to go on the market,” he said.


Perth







Source: PropTrack. Suburbs ranked by % YoY change in median value for houses and units.


Suburb

Region (SA4)

Property

 Median value (AVM)

YoY change (%)

YoY change ($)

1

Girrawheen

Perth - North West

House

$552,142

38.6%

$153,638

2

Kelmscott

Perth - South East

House

$536,791

37.5%

$146,476

3

Leda

Perth - South West

House

$541,748

37.3%

$147,259

4

Mirrabooka

Perth - North West

House

$565,535

36.7%

$151,979

5

Medina

Perth - South West

House

$444,312

36.4%

$118,529

1

Kallaroo

Perth - North West

Unit

$536,417

39.5%

$151,813

2

Kinross

Perth - North West

Unit

$517,534

31.3%

$123,478

3

Nollamara

Perth - North West

Unit

$540,181

29.9%

$124,495

4

Clarkson

Perth - North West

Unit

$476,639

31.0%

$112,879

5

Currambine

Perth - North West

Unit

$461,941

30.5%

$108,084

The Western Australian capital has been Australia's strongest performing property market for the past few years, with affordability a major driving factor.

The vast majority of suburbs in Perth have median values under $750,000, increasing the city's appeal with interstate buyers.

Perth didn't experience a downturn in 2022 when prices fell in most other capitals amid rising interest rates, with its relative affordability, strong population growth off the back of a resurgence in the mining industry, and a shortage of homes driving growth.

Of the city's more affordable suburbs, the strongest growth was found in outer suburbs near the coast in the north and south, as well as suburbs a little closer to the city in the north like Girrawheen and Mirrabooka.



After exceptionally strong price growth this year, values have jumped up to $150,000 in several of these affordable suburbs — a life-changing figure for some homeowners — yet a typical property still costs less than $600,000.


More from News

Real estate agent Alex Dabag of Harcourts described the market in Girrawheen as "very hot" and said the uplift in values in recent years had been "a long time coming" following a period of declining prices.

About 50-60% of buyers purchasing in Girrawheen were investors, according to Mr Dabag, made up of both locals and those purchasing from interstate, with the balance largely made up of first-home buyers.

“There’s a huge demand from eastern state buyers purchasing in this pocket," he said.

“There’s a lot of interest in Girrawheen because it’s a lot more family oriented. It’s quite close to the city and beach at the same time.”


Adelaide







Source: PropTrack. Suburbs ranked by % YoY change in median value for houses and units.


Suburb

Region (SA4)

Property

 Median value (AVM)

YoY change (%)

YoY change ($)

1

Elizabeth North

Adelaide - North

House

$423,791

35.2%

$110,240

2

Elizabeth South

Adelaide - North

House

$457,182

34.3%

$116,847

3

Elizabeth Downs

Adelaide - North

House

$463,176

32.8%

$114,389

4

Davoren Park

Adelaide - North

House

$429,970

30.8%

$101,246

5

Elizabeth Vale

Adelaide - North

House

$539,077

30.1%

$124,777

1

Fulham

Adelaide - West

Unit

$565,676

30.5%

$132,260

2

Rosewater

Adelaide - West

Unit

$422,304

29.4%

$96,055

3

Salisbury East

Adelaide - North

Unit

$423,418

27.7%

$91,718

4

Morphett Vale

Adelaide - South

Unit

$511,111

27.5%

$110,383

5

Mansfield Park

Adelaide - West

Unit

$465,574

27.0%

$98,958

The fastest growing affordable Adelaide suburbs for houses were all found in the city's north, while booming suburbs for units were mostly in the west.


Adelaide's north has had some of the nation's fastest house price growth since the pandemic, with values up by more than 150% in some areas since the pandemic.

It's also one of the least expensive parts of Adelaide, with median house values still below $400,000 in some suburbs despite jumping by up to 35% over the past year.

In many of the fastest growing suburbs, that increase has pushed up median values by more than $100,000 in just a year.




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