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Australia’s most affordable suburbs near the city or beach for first home buyers on $400,000 budget

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Houses a short drive from the beach or the city are still affordable for first-home buyers on a $400,000 budget.

Mortgage broker Aussie is recommending postcodes where borrowers can get a loan with a deposit of $40,000, or the price of a new car, and not be struggling to pay their bills on an average salary.

On the Central Coast, a little more than an hour’s drive north of Sydney, someone able to work from home can still buy a house for $415,000 at Wyee in the Lake Macquarie area, CoreLogic data on median prices for October found.

They would only need $41,500 for a minimum 10 per cent deposit if they were prepared to pay lender’s mortgage insurance.

Houses a short drive from the beach or the city are still affordable for first-home buyers on a $400,000 budget. Mortgage broker Aussie is recommending postcodes where borrowers can get a loan with a deposit of $40,000, or the price of a new car, and not be struggling to pay their bills on an average salary  (pictured is an Aussie map showing more affordable areas in purple)

Houses a short drive from the beach or the city are still affordable for first-home buyers on a $400,000 budget. Mortgage broker Aussie is recommending postcodes where borrowers can get a loan with a deposit of $40,000, or the price of a new car, and not be struggling to pay their bills on an average salary  (pictured is an Aussie map showing more affordable areas in purple)

The median price is also less than half the Central Coast’s mid-point house price of $954,330, which would buy something with a backyard at Woy Woy.

In Brisbane, the median house price at Acacia Ridge only 15km south of the city, is $452,500 – requiring a deposit of just $45,250.

This is also significantly less than Brisbane’s median house price of $731,392. 

In Sydney, someone on a $400,000 budget wanting to be a middle-distance from the city has to buy an apartment.

Lakemba, in the city’s multicultural south-west, is a half-hour train ride from the city and the median apartment price in October was just $382,500 – or less than half greater Sydney’s mid-point unit price of $837,262.

A borrower would be able to buy with a 10 per cent deposit of just  $38,250.

On the Central Coast, a little more than an hour's drive north of Sydney, someone able to work from home can still buy a house for $415,000 at Wyee in the Lake Macquarie area, CoreLogic data for October found (pictured is a house that sold for $450,000)

On the Central Coast, a little more than an hour’s drive north of Sydney, someone able to work from home can still buy a house for $415,000 at Wyee in the Lake Macquarie area, CoreLogic data for October found (pictured is a house that sold for $450,000)

Those after an affordable house in Sydney can try Box Hill, 50km north-west of the central business district, where the median house price is $611,500.

Brad Cramb, Aussie's chief executive of distribution, said stricter lending rules meant buyers needed to reconsider their choices

Brad Cramb, Aussie’s chief executive of distribution, said stricter lending rules meant buyers needed to reconsider their choices

That is less than half Sydney’s median house price of $1.334million, following an annual increase of 30.4 per cent. 

Someone only needs a 10 per cent deposit of $61,150 to get a loan. 

With a 20 per cent deposit, a borrower on an average-full-time salary of $90,329 can borrow $489,200 and avoid being in mortgage stress.

In Melbourne, the mid-point price for a city apartment is just $426,750, with a deposit of $42,675 enough to get a loan.

The median price for an apartment at beachside St Kilda is $550,000 –  requiring a 10 per cent deposit of just $55,000. 

The Australian Prudential Regulation Authority considers a debt-to-income ratio of six to be risky and has, since November 1, required lenders to assess a borrowers’ ability to cope with a three percentage point rise in mortgage rates.

In Brisbane, the median house price at Acacia Ridge only 15km south of the city, is $452,500 - requiring a deposit of just $45,250 (pictured is a house which sold for $450,000)

In Brisbane, the median house price at Acacia Ridge only 15km south of the city, is $452,500 – requiring a deposit of just $45,250 (pictured is a house which sold for $450,000)

Brad Cramb, Aussie’s chief executive of distribution, said stricter lending rules meant buyers needed to reconsider their choices.

Commonwealth Bank predictions for home prices

SYDNEY: 2021 (Up 27 per cent); 2022:  (Up 6 per cent); 2023 (Down 12 per cent)

MELBOURNE: 2021 (Up 17 per cent); 2022 (Up 8 per cent); 2023 (Down 10 per cent)

CANBERRA: 2021 (Up 26 per cent); 2022 (Up 7 per cent); 2023 (Down 10 per cent) 

BRISBANE: 2021 (Up 26 per cent);  2022 (Up 9 per cent); 2023 (Down 8 per cent)

ADELAIDE: 2021 (Up 22 per cent);  2022 (Up 6 per cent); 2023 (Down 8 per cent)

PERTH: 2021  (Up 13 per cent); 2022 (Up 3 per cent); 2023 (Down 9 per cent)

HOBART: 2021 (Up 29 per cent); 2022 (Up 5 per cent); 2023 (Down 12 per cent)

DARWIN: 2021 (Up 17 per cent); 2022 (Up 7 per cent); 2023 (Down 8 per cent)

Source: Commonwealth Bank of Australia forecasts for dwellings or houses and units together

‘With rising property prices and recent changes to lending criteria from APRA creating some concerns around housing affordability, we wanted to show homebuyers that there are still opportunities to get into the property market if you expand your suburb search and adapt your thinking around how you might structure your home loan,’ he said.

‘You don’t always need to have a 20 per cent deposit to buy a home.’

The Commonwealth Bank, a major shareholder in Aussie, is predicting Sydney’s property prices will surge by 27 per cent in 2021 before slowing to 6 per cent in 2022 and plunging by 12 per cent in 2023.

Philip Lowe, the Governor of the Reserve Bank of Australia, is now indicating the cash rate will be raised from a record low of 0.1 per cent in 2023 instead of 2024 as previously promised.

But the Commonwealth Bank’s head of Australian economics Gareth Aird is predicting interest rates will now be raised in November 2022, marking the first cash rate increase in 12 years.

‘The Australian housing market is in the twilight of an incredible boom that has been fuelled by record low mortgage rates,’ he said.

Mr Aird is now predicting the Reserve Bank will raise the cash rate to 1.25 per cent by the September 2023, a level unseen since mid-2019, which ‘lies at the heart of our expectation that home prices will contract’.

Should that prediction materialise, the RBA would be raising rates five times, on each occasion by 0.25 percentage points judging by previous moves.

In the year to October, house and apartment values nationally rose by 21.6 per cent, marking the sharpest annual increase since early 1989.

By comparison, wages in the year to September edged up by just 2.2 per cent.

The mid-point national property price of $686,339 is now so dear someone earning an average, full-time salary of $90,329 would owe the bank six times their salary, even with a 20 per cent deposit.

In Sydney, someone on a $400,000 budget wanting to be a middle-distance from the city has to buy an apartment. Lakemba, in the city's multicultural south-west, is a half-hour train ride from the city and the median apartment price in October was just $382,500 - or less than half greater Sydney's mid-point unit price of $837,262 (pictured is a two bedroom unit on the market for $370,000 to $405,000)

In Sydney, someone on a $400,000 budget wanting to be a middle-distance from the city has to buy an apartment. Lakemba, in the city’s multicultural south-west, is a half-hour train ride from the city and the median apartment price in October was just $382,500 – or less than half greater Sydney’s mid-point unit price of $837,262 (pictured is a two bedroom unit on the market for $370,000 to $405,000)



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Written by Bourbiza Mohamed

A technology enthusiast and a passionate writer in the field of information technology, cyber security, and blockchain

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