‘Most serviceable’ suburbs revealed: PropTrack

Mortgage repayments are increasing for a lot of home owners as a result of the Reserve Bank of Australia’s (RBA) 12 rate hikes since May 2022. However, new PropTrack data has shown the “most serviceable” suburbs in Australia to own a house or a unit.

The suburbs with the smallest mortgage repayments relative to incomes include:

• Fisherman Bay, regional South Australia – Monthly house mortgage repayments of $270 are 2.7 per cent of the average total income in the area at $61,000 per annum.

• Kambalda West, regional Western Australia – Monthly house mortgage repayments of $670 are 4.4 per cent of the average total income in the area at $92,000 per annum.

• Blackwater, regional Queensland – Monthly house mortgage repayments of $860 are 5.2 per cent of the average total income in the area at $98,900 per annum.


*Table provided by PropTrack

Proptrack economist Angus Moore said while mortgage repayments have risen sharply in the last 14 months, there are still some parts of Australia where mortgages are affordable relative to average incomes within the suburb.

“These are mostly in regional areas, where prices are lower,” Mr Moore stated.

“But even in the capital cities, there are some pockets where mortgage costs remain on the more affordable side relative to incomes.

“These are typically in outer suburban areas like the outer west or Central Coast in Sydney, the west in Melbourne, or Ipswich in Brisbane.”

Mr Moore added that units in “very prestigious markets” — particularly Paddington and Vaucluse — end up looking affordable, however, this is reflective of incomes.

“Average incomes in these areas are quite high (in excess of $200,000 in some cases); but the people buying units in these areas are probably not earning that income,” he said.


*Table provided by PropTrack

Serviceability buffers shrinking borrowing capacity

Domain’s Forecast Report Financial Year 2023–24 indicated that some borrowers may find it difficult to purchase a property due to higher rates and serviceability buffers causing the maximum borrowing capacity to “shrink significantly”.

However, the report noted that it may steer demand to the affordable end of the housing market, whether that is more affordable locations or cheaper property types.

As economic conditions have changed rapidly over recent months, which could equally be the case in the next 12 months, according to the report, as the market is pricing interest rate cuts from early 2024.

Should this occur, there may be an increase in borrowing/buying power, exerting upward price pressures on the housing market.

[RELATED: Buffers and rates shrank borrowing capacity ‘significantly’: Domain]