PropTrack reveals Australia’s ‘affordability havens’

PropTrack’s latest Affordability Hotspots Report has identified Western Australia and Queensland as Australia’s “affordability havens”.

According to the report, just over half of all regions across the country with homes that are affordable for those on median incomes are contained within these two states.

The affordable capital city region was located south of Perth in Kwinana, with an affordability index of 0.79, with the median income household in Perth being able to afford 20 per cent of homes sold in that area over the past year, spending up to 25 per cent of pre-tax income.

The report revealed that 41 per cent of regions in Western Australia have a large proportion of homes affordable to those on median income, representing 25 per cent of all affordable regions across Australia.

Meanwhile, Queensland and the Northern Territory also had a larger portion of regions with better affordability conditions when compared to the rest of the country.

Over one-third of all regions where a median income household can afford 20 per cent of home sales were located in Queensland, according to the report.

Sydney remains as the most unaffordable city in Australia with only 3.8 per cent of home sales being affordable for median-income households, while only 7.1 per cent of home sales were affordable for these households in Melbourne.

PropTrack senior economist and report author Paul Ryan said: “It’s no secret the property
market is incredibly tough right now for first home buyers and lower income households. This
report has been able to isolate pockets around the country where access to the market remains
relatively affordable.

“Looking across Australia, the most affordable capital city regions are located in Perth.

“Affordability remains a key driver of the strength in the Western Australian market, with Perth
seeing the strongest price growth of any market over the past year.”

This report came as the latest Housing Affordability Report released by ANZ and CoreLogic found that mortgage serviceability further deteriorated over the March quarter of 2024 due to continued mortgage rate increases.

According to the report, the portion of median income needed to service a new loan median dwelling value reached 48.9 per cent nationally as home values hit a new record high in November 2023 with a further cash rate rise in the same month.

This has marked a new record high for the series, sitting well above the previous decade’s average of 34.6 per cent.

Although median-income households are not likely to be spending this high proportion of income on servicing mortgages, the report noted that it “reinforces how out of step home values are with current income and interest rate levels”.

[RELATED: Almost 50% of income needed for new mortgages: ANZ/CoreLogic]