The most affordable and livable suburbs for first-time home buyers have been revealed in a new report that takes into account price growth, local amenities and attractiveness to investors.
In Sydney, the top picks were the city’s southern suburbs including Miranda, Peakhurst and Riverwood, while in Melbourne, nearby Greensborough and Briar Hill in the northeast made the list along with Mulgrave in the southeast , according to the PRD Affordable and Liveable Property Guide, First Half 2022.
The ranking focused on suburbs within a 20km radius of the CBD that have positive or near-neutral price growth, average or above-average rental yield, a high pipeline of new development projects, a low crime rate, amenities within 5km and average unemployment.
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It comes as the housing market slows from its pandemic-era boom as buyers brace for a series of interest rate hikes and adjust to a new home loan rule introduced last year that has reduces the maximum borrowing capacity.
PRD Real Estate’s chief economist, Dr Diaswati Mardiasmo, said some first-time home buyers may have the option to buy now that the market has started to slow and government assistance is on the way, and pointed to “diamond in the rough” quarters that buyers may have overlooked.
“Most of the time, first-time home buyers tend to be locked into areas where they’ve lived their entire lives,” she said. “This report asks you to cast your net wider.”
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She said when shoppers think of affordability they associate it with being cheap, but a cheap suburb may not have transport links or amenities. And while the report’s criteria are “pretty basic – we don’t make sure there’s a nearby entertainment center or art gallery”, the ranking offers some suggestions that may not be so familiar. to buyers.
For buyers looking further afield, on the Gold Coast, the report suggested Oxenford, Carrara and Mudgeeraba; in Brisbane, Tingalpa, Geebung and Lota; and in Hobart, Warrane, Mornington and Clarendon Vale.
Mardiasmo warned buyers in the market that rising interest rates could reduce their ability to borrow, driving down property prices but also reducing the amount they can bid at auction.
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Laing + Simmons Miranda co-manager Peter Green said his neighborhood has always been one that has attracted first-time home buyers.
“Miranda has the facilities of the great Westfield, it’s only a 10 minute drive to the beach and you have transport with the train station,” he said.
“It’s a good place for young people to start.”
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He recently noticed that several investors were selling their properties to first-time home buyers, although he added that this had reduced the stock of rental properties available and started to drive up rents.
Sales prices are starting to drop slightly, he said, with two-bedroom townhouses and villas on offer starting at around $900,000 and entry-level three-bedroom homes ranging from 1 at $1.1 million.
“There’s definitely a trend where prices are coming back, they’re stabilizing – definitely a good opportunity for first-time home buyers to enter the market now,” he said.
In Melbourne, Darren Jones Real Estate director Ashley Croall has also set up early buyers in and around Greensborough.
“A large percentage [of buyers] are residents, who grew up in the area and chose to buy in the area where they grew up,” he said.
“We’re attracting a number of first-time home buyers from outside the area because it’s still, I would say, good value for money given the infrastructure and where we are. are situated.”
Proximity to town and the rail link are pluses, along with sought-after schools and the family-friendly nature of the neighborhood, he said.
“A lot of people come to root for future projects,” he said.
“We have a lot of our customers who are going to sell, who have been at home for 30, 40, 50 years.”
Townhouses start at around $700,000, while entry-level homes would start between $800,000 and $900,000 depending on the condition of the home, he said.
He expects a stable market over the winter period, although further interest rate hikes are looming.
“People will always, for personal reasons, have to buy and sell, so there are always buyers in the market and there are always sellers,” he said.
This story first appeared on Sydney Morning Herald.