The popularity of suburbs an hour away from states’ and territories’ central business districts is climbing, as more people look into staying in the area instead of buying a unit there to “break into” the housing market.
Data from PropTrack has recently shown South Australia to be the most affordable state for homes less than 40km from the city. Elizabeth South, just 21km from Adelaide, features homes with a median sale price of only $221,068. In Elizabeth Vale, likewise 21km from the CBD, the median sale price for a unit is $146,173.
“For 12 months I’ve been looking for either other rentals or to buy, but with the cost of rentals it makes more sense to just buy and pay your own mortgage,” accountant manager Kellie Walduck told news.com.au on her recent purchase of a home in Elizabeth Vale for $340,000. Now, she claims, “you couldn’t pay me enough to live in the city.”
Her home is close to shopping centres, schools, and ample public transport. The unit itself has “huge backyard space, decent[-sized bedrooms], and a lock-up garage,” a safety feature Walduck deemed important as a single mom with a toddler.
Mortgage Choice broker Caroline Jean-Baptiste said a property in the suburbs that failed to tick every box would still be desirable for other factors, such as being a new suburb, having a good school, or being affordable. Still, she said that buyers need to be realistic when buying their first homes, calling them “a stepping stone into the property market.”
“And once you’re in the market, it becomes easier to upgrade to your dream home,” she told news.com.au.
“Investors also look in [homes an hour from each state’s CBD], because … rental yields on the outskirts of cities tend to be much greater than they are closer into the city centre,” said PropTrack director for economic research Cameron Kusher. “COVID has also driven some people who already own homes to move to these areas, if they are looking for that lifestyle, but also don’t need to go back into the office as regularly as they used to.”
But demand has pushed prices higher in these outer suburbs over the last five years.
“They have increased in popularity and since the onset of the pandemic we have seen more affordable suburbs in most cities outperform, in terms of price growth, in the areas closer into the city,” Kusher said.