First home buyers have had a tough time in recent years as property values soared across a number of state capitals. But market conditions are very different today, and with values down in many areas, a new report by Aussie Home Loans and CoreLogic reveals Australia's cheapest suburbs to buy a home.
According to the Affordable Suburbs Report, Mount Magnet in outback WA scoops the pool as the nation's cheapest suburb. As long as you don't mind living several hundred kilometres out of Perth, it's possible to buy a house for $37,000.
Of course, the bulk of our population is clustered around state capitals, and the current market offers some exceptional value. In Sydney and Melbourne, home values have slipped 13.9 per cent and 10.3 per cent respectively since peaking in late 2017.
In Melbourne, Melton offers a median house value of $389,190. It's the city's only suburb where a budget below $400,000 could secure a house. The big surprise is that popular inner ring suburbs like Coburg, Carlton and Prahran all have median apartment values below $525,000.
Along with lower property values, first home buyers can also take advantage of a competitive mortgage market. Figures from Mozo show 23 lenders have cut home loans rates since the start of March. Bendigo Bank for instance trimmed its basic variable home loan rate by 0.2 per cent. ME Bank has slashed its fixed rates by up to 0.5 per cent. It goes to show that if you're aiming to take that first step on the property ladder, it pays to shop around for the suburb you buy in - and the lender you choose, to stretch your budget further. The full report can be downloaded from www.aussie.com.au/mostaffordablesuburbs.
Paul Clitheroe is Chairman of InvestSMART, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.