Revealed: Australia’s affordable property hotspots

REA Group’s data business, PropTrack, has identified the regions of Australia where affordability is best for home buyers, with Perth dominating the list when it comes to capital city hotspots.

Western Australia and Queensland dominate PropTrack’s list of Affordability Hotspots”, with those two states together having just over half of all regions across the country containing affordable homes.

The report confirms Sydney is Australia’s least affordable city, but there are some surprises when it comes to where affordability can be found in Melbourne, Adelaide, Perth and even Sydney.

Methodology

To rank the housing affordability of all parts of Australia, PropTrack runs its Housing Affordability Index measure across each of the Australian Bureau of Statistics 358 Level 3 regions (SA3s).

The index measures the proportion of homes sold from July 2023 to March 2024 that are affordable to households across the income distribution, when 25% of that household’s pre-tax income is spent on mortgage repayments.

It’s generally accepted that spending more than 25% of pre-tax income on housing puts households into mortgage or rental “stress”.

PropTrack has also calculated the percentage of homes that are affordable to households on a median income in a particular area, providing another interesting metric.

“It's no secret the property market is incredibly tough right now for first-homebuyers and lower-income households,” says the report’s author, PropTrack Senior Economist Paul Ryan. 

“This report has been able to isolate pockets around the country where access to the market remains relatively affordable.”

And the winner is?

Perth.

When it comes to housing affordability in capital cities, Perth wins hands down.

The WA capital had the most affordable regions of any city.

Kwinana, in Perth’s southern suburbs, is the most affordable capital city region in Australia, with PropTrack giving it an affordability index of 0.79.

“A median income Perth household can still afford 20% of homes sold there over the past

year, spending up to 25% of their pre-tax income,” Paul Ryan says.

Gosnells, Armadale, and Mandurah, also in Perth’s southern and outer southern suburbs also make the top five.

But it’s not necessarily a case of having to go far from the city centre to find affordability.

The SA3, which takes in Victoria Park (just 5 km from Perth’s CBD) and nearby Belmont (8 km from Perth’s CBD), rounds out the Top five affordable capital city areas in Australia.

That affordability, however, has not gone unnoticed. Strong demand for property in all five areas of Perth has sent prices soaring at least 20% over the past year.

“Affordability remains a key driver of the strength in the Western Australian (property) market,” PropTrack’s Paul Ryan says, “with Perth seeing the strongest price growth of any market over the past year.”

As for the top 5 affordability spots outside capital cities, these are all in remote areas of Australia: Outback South and North in Queensland, Broken Hill and the Far West in New South Wales, the WA Wheat Belt (South), and the Bourke-Cobar-Coonamble region in New South Wales.

Unaffordable Sydney

It’s a glum picture when it comes to housing affordability in Sydney, with PropTrack finding only 3.8% of home sales in the city affordable for median income households.

But it may come as a surprise to find that the most affordable region in Sydney is actually the major hub of Parramatta.

PropTrack says a median-income Sydney household can only afford 9% of home sales there.

Nevertheless, the news that affordable housing can be found in an area that is a significant employment, transport, and educational hub and which has great restaurants and a vibrant cultural life, should be a source of some comfort to discouraged home-buyers.

“Unusual” Melbourne

PropTrack says Melbourne is “unusual in that its inner city is the most affordable part of the city.”

The data analytics firm says this is driven by the large number of units in the CBD and surrounds, “which allows well-located living at affordable price points.”

According to PropTrack, “a median income Melbourne household can afford 24% of homes sold in the inner city.”

Compare that to a city-wide figure of just 7.1%.

But for first-home buyers, particularly those looking to buy a house, PropTrack’s advice is to “look west”, as the suburbs to Melbourne’s west and north-west hold the best affordability.

“While in many of these regions, few homes are affordable for those on median incomes or lower, a larger share of homes are affordable across the income distribution,” Paul Ryan says.

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Queensland

Suburbs in Brisbane’s outer south and west hold the most favourable affordability, according to PropTrack.

These include the areas around Springwood and Kingston, Beenleigh, and Beaudesert in the Logan area, and parts of Ipswich.

“Outside of Brisbane, outback regions feature some of the best affordability in the country, with households able to afford homes in higher proportions than their position on the income distribution,” Paul Ryan says.

Adelaide - no longer so affordable

PropTrack says strong price growth over the past couple of years in the South Australian capital has “dampened the favourable affordability conditions that have supported the market since the onset of the pandemic.”

It says the city’s northern suburbs remain the most affordable, but also central Adelaide “remains an affordable option despite a period of very strong price growth, largely due to the higher concentration of units within the CBD.”