Historic low interest rates are fuelling an investor-driven housing market, pushing property prices up and often making it tough for owner-occupiers to get into the market.
Nowhere is this more apparent than the inner city, where demand for housing is higher than ever.
Buyers on a budget, especially those looking to start a family, are beginning to pass off the inner city as out-of-reach and resign themselves to a longer commute if they work in the CBD.
But should they give up entirely?
There are still family homes in the inner-ring selling for competitive prices. You just need to know where to look.
We’ve found the cheapest five suburbs in each state by looking at the lowest median sold price for two and three bedroom houses sold in the last 12 months.
Unsurprisingly, the cheapest homes nationwide are in Tasmania, where a relatively small population means supply and demand is yet to catch up to the mainland.
Outside of Tasmania, the suburb with the lowest median price within 10km of the CBD is Kilburn, just north of Adelaide.
Beverley Philpott, Principal of DP Philpott Real Estate says Kilburn is one of the most underrated suburbs in South Australia.
“It’s a great suburb with some great houses, predominately 1950s and 1960s-built, but some older homes, and lots of new homes on large blocks.
“There’s a lot of development on Churchill Road and that has made the area quite buoyant. If you go down to the shopping centre on the weekend it’s packed.
“Adjoining suburbs are Prospect, Adelaide and North Adelaide – that’s how close to the city it is. You can drive to the CBD in less than 15 minutes.
“People buying into the area now will reap the rewards in the future. I think it’ll only be a couple of years before Kilburn will see a real growth spurt.”
In Victoria, the message is clear: west is best. The top five most affordable inner-city suburbs are all west of the river, led by West Footscray with a median sold price of $542,000.
A peripheral suburb of the popular Yarraville and Seddon areas, West Footscray has risen in popularity, especially for those working in the Melbourne’s Docklands precinct.
Craig Stephens, Principal of Jas Stephens Real Estate says suburbs like West Footscray are popular with artists, musicians and shift workers.
“You might have someone renting in Yarraville or Seddon, but buying in West Footscray. They move into the peripheral suburbs when they’re ready to buy their first home,” Stephens says.
In Victoria, west is best.
“If you live on the other side of the city, the rent is 30% more expensive, and getting to the Docklands is a bit of a hassle.
“There’s a lot of double-income-no-kids (DINK) buyers moving into West Footscray. They like the fact that it’s a bit grungy but still close to the city.”
The most affordable five suburbs in each state, based on median sold price for two and three bedroom houses. Listed in order of affordability, with bedroom configuration and median sold price.
Hobart’s Clarendon Vale is the most affordable inner-city suburb in the country.
- Clarendon Vale, 3-bed, $143,000
- Risdon Vale, 3-bed, $169,500
- Rokeby, 3-bed, $191,000
- Glenorchy, 2-bed, $213,000
- Warrane, 3-bed, $232,250
- Kilburn, 2-bed, $307,500
- Woodville Gardens, 3-bed, $307,500
- Mansfield Park, 3-bed, $330,000
- Morphetville, 2-bed, $340,000
- Woodville North, 3-bed, $355,000
- Rocklea, 3-bed, $367,500
- Salisbury, 2-bed, $418,750
- Northgate, 2-bed, $452,500
- Keperra, 3-bed, $457,500
- Chermside, 2-bed, $473,000
- Tuart Hill, 2-bed, $422,000
- Morley, 2-bed, $430,000
- Dianella, 2-bed, $437,712
- Westminister, 3-bed, $443,000
- Belmont, 2-bed, $450,000
West Footscray has the most affordable housing within 10km of Melbourne.
- West Footscray, 2-bed, $524,000
- Maidstone, 2-bed, $530,000
- Footscray, 2-bed, $575,000
- Maidstone, 3-bed, $595,000
- West Melbourne, 2-bed, $608,000
- Moil, 3-bed, $537,500
- Alawa, 3-bed, $545,000
- Anula, 3-bed, $550,000
- Millner, 3-bed, $552,000
- Jingili, 3-bed, $567,000
- Tempe, 2-bed, $843,250
- Mascot, 2-bed, $876,000
- St Peters, 2-bed, $905,000
- Earlwood, 2-bed, $912,000
- Petersham, 2-bed, $918,000
By Alice Bradley – 11th September 2015