23 Apr Housing affordability on the agenda
The First Home Buyer Report released last week could have left many entry-level buyers in a state of dismay, the narrowing market options helping to exacerbate the feeling of being closed out of the market.
Entry-level buyers do have choice in Canberra by casting the search to a wider scope of property type. The picture-perfect detached family residence is fast becoming a receding first-home dream. Elevated house prices have pushed even the most affordable suburbs out of the first home buyer budget. The delightful prospect of options becomes possible once units are put into the housing equation. A number of suburbs then fall within the entry-level price point.
The entry budget is determined by the average first home loan approved over the 12 months to the end of March, based on housing finance data released by the Australian Bureau of Statistics. A realistic dollar figure is reached by factoring in the ACT Government’s First Home Buyer Grant, currently $7,000, and a 20 per cent deposit. This equated to the average first home buyer hitting the market with $403,969. It is this average figure that is used as the affordability price-point cut-off.
The district of Belconnen had the highest proportion of affordable suburbs, with eight falling under the first-time budget. Hawker is the most affordable suburb in Canberra with a median sale price of $277,500 for a unit, based on transactions over the 12 months to the end of March.
It is a well-known trend that prices tend to slide the further from the city hub. It is always anticipated Canberra would experience this trend to a lesser degree due to the satellite city nature. However, many of the affordable suburbs remain at the territory fringe.
The Belconnen district offers the greatest choice for buyers on an entry budget. The following suburbs within reach are Macgregor at $345,000, Holt at $358,500, Florey at $360,000, Belconnen town centre at $380,000, Bruce at $388,000, Page at $395,000 and Kaleen at a median sale price of $399,500.
Tuggeranong is the next hotspot for buyers keen to break into the market. Six suburbs in the district fell under the average first-home budget. Greenway is the district’s most affordable suburb with units commanding a median sale price of $350,000, Calwell at $360,000, Conder at $368,000, Gordon at $375,000, Isabella Plains at $376,000 and Bank at $386,000 offer entry-level choice.
Many affordable developments can also be found in the Gungahlin district. Franklin, Gungahlin town centre, Ngunnawal and Palmerston offer a price-conscious choice.
Many mid- to high-density developments are providing opportunities for first-home buyers. Moving forward is imperative to provide a diverse array of affordable housing stock to meet community demand. Housing affordability is certainly on the agenda and likely to be until activity is bolstered.
“In Sydney too, despite high levels of inner-city apartment construction, the vacancy rate is just 1.7 per cent across the city and 0.3 per cent in the CBD. We may, however, see a bounce in April across cities as demand for rental properties drops back.”
Sydney and Melbourne’s March vacancy rates were also lower than the same time last year, dispelling concerns of a major oversupply of housing in these two cities, although there were now confirmed oversupply of dwellings in Brisbane, Perth and Darwin, Mr Christopher said.
Other cities also had the similar results. Canberra posted an even tighter rate at 0.8 per cent, down from 0.9 per cent while while Adelaide fell to just 1.8 per cent, down from 2.0 per cent in February.
Overall, the national vacancy rate fell to 2.3 per cent in March, down from 2.4 per cent.
The Real Estate Institute of NSW also provided the same data for Sydney, saying middle Sydney suffered the lowest vacancy.
“Middle Sydney led the fall in rental accommodation on offer with a 0.4 per cent decline at 1.4 per cent,” REINSW president John Cunningham said. “Outer Sydney fell 0.1 per cent at 2.1 per cent and Inner Sydney was down 0.1 per cent at 1.6 per cent.” Across regional areas, the Northern Rivers has the lowest vacancy rate at 1 per cent, down 0.1 per cent.
Reflecting the low vacancy rate, asking rents for apartments jumped 1.6 per cent and 0.7 per cent for houses in Melbourne over the month to April 12, SQM said.
Asking rents for apartments in Sydney also leapt 1.7 per cent over the month. Canberra apartment rents rose 1.5 per cent.
But, house asking rents fell in those two cities.
Darwin and Perth asking rents continue to fall in the opposite direction as vacancy in the two cities remain the highest at 3.5 per cent and 4.7 per cent respectively in March.
Overall, the continued rise in house prices has resulted in a generation of renters emerging in the major cities such as Sydney and Melbourne, and forcing down vacancy rates.