Melbourne and Sydney housing markets more affordable for wishful buyers

That’s according to PRD Research’s latest Affordable and Liveable Property Guide, which considers the Australian property market in the second half of 2023. 

Median property prices in Sydney and Melbourne have slipped in recent months, potentially allowing those previously priced out to gain access to the housing market.

On the other hand, Brisbane and the Gold Coast were found to be the least friendly cities for hopeful homeowners. 

“Many people struggle with the idea that Sydney is affordable,” PRD chief economist Diaswati Mardiasmo said.

“The struggle is valid, because if we look at the chosen suburbs, Sydney does still have a higher price point than Brisbane and the Gold Coast.

“What we are talking about here is that Sydney and Melbourne are becoming more affordable for local buyers of the area, whereas Brisbane and the Gold Coast are becoming more expensive.”

But PRD doesn’t simply find a city's ‘cheapest’ suburbs, rather it attempts to identify the ‘best’ suburbs, lending weight to affordability, invest-ability, and liveability.

“In terms of choosing suburbs that balance affordability and liveability, and given that many suburbs in Sydney and Melbourne had already ticked the liveability box in previous reports, it was much easier to find chosen suburbs in Sydney and Melbourne [than in Brisbane and the Gold Coast]," Dr Mardiasmo said.

The report considers suburbs within 20 kilometres of a CBD (10 kilometres from Hobart) and takes into account price growth, rental yields, vacancy rates, and future development projects. 

To be considered both affordable and liveable, a suburb also must offer a median property price below a threshold (based on a state’s average home loan), a low crime rate, easy access to amenities, and a below-average unemployment rate.

Perth and Adelaide possess the most suburbs considered affordable and liveable. 

Sydney lived up to its reputation of the most expensive city, while prices in Brisbane, Melbourne, and the Gold Coast came out on par – marking a notable change in recent years.

Affordable and liveable suburbs in Sydney 

Rising interest rates have had an impact on the Sydney property market in recent times. 

Though, confidence appears to have returned to the market and there is still more demand than there is supply. 

The most affordable and liveable suburbs offered to those buying houses in the harbour city include:

While for units, these suburbs stood out:

Affordable and liveable suburbs in Melbourne

The Melbourne property market has softened in recent times, PRD Research notes. 

However, since the majority of new housing stock expected to hit the market is made up of units and townhouses, the downturn is likely to be temporary.  

Current affordable and liveable suburbs for house hunters include:

While those in the market for a unit might find these suburbs appealing: 

Affordable and liveable suburbs in Brisbane and the Gold Coast 

Property values in Brisbane and the Gold Coast have lifted to approach those of Melbourne in recent times, the report found.

Incoming housing stock in the two locations will mainly be ready-to-sell units, likely resulting in a long-term undersupply of houses. 

The most affordable and liveable suburbs for houses in each of the cities include:

While for units, these suburbs stood out:

Affordable and liveable suburbs in Perth

Like those of Sydney and Melbourne, the Perth property market is being impacted by rate hikes and lower consumer sentiment, albeit to a lesser degree.

The suburbs that stand out in the Western Australian capital for houses now include:

For units, the city’s most affordable and liveable suburbs include:

Affordable and liveable suburbs in Adelaide

Like those of most Australian cities, the Adelaide property market appears to be undersupplied at the moment. 

Though, PRD notes the current cash rate environment provides an opportunity for first home buyers to enter the market. 

Some of the city’s most affordable and livable suburbs for houses are:

Meanwhile, stand out unit markets include:

Affordable and liveable suburbs in Hobart

The Hobart housing market has had rough slog in recent times, but the worst might be over for the Tasmanian capital in terms of prices tumbling.

A planned infrastructure boom could drive population growth in Hobart’s metro area and, therefore, demand for housing could rise significantly. 

“Now is the time to enter the market,” the report reads. 

Some of Hobart's most affordable and liveable suburbs for houses include:

Meanwhile, those for units include:

Read more: First Home Buyer Buying a home Investing Economic News

Brooke Cooper

Finance Journalist

Brooke Cooper joined the InfoChoice Group in 2023. She previously wrote for the Motley Fool, covering topics such as share prices, companies, and IPOs. With interests in everyday finance and wealth, Brooke is passionate about educating Aussies - especially young adults - on all things money.

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