What are the most affordable and liveable Australian suburbs in 2021?

author-avatar By on May 27, 2021
What are the most affordable and liveable Australian suburbs in 2021?

A new report has uncovered where buyers should look if they're searching for both affordability and liveability in the capital cities.

The PRD Real Estate Affordable and Liveable Property Guide analysed Sydney, Melbourne, Brisbane, and Hobart suburbs on five sets of criteria: property trends, investment, affordability, development, and liveability.

Some of the top suburbs for houses identified were Ferny Grove in Brisbane, Jannali in Sydney, Geilston Bay in Melbourne, and Kingston in Hobart. 

For units, Coorparoo in Brisbane, Narwee in Sydney, Northcote in Melbourne, and Howrah in Hobart were some of the top picks. 

Affordable and liveable suburbs, first half of 2021

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Source: PRD Research

Affordability was judged by having a median price below a set threshold and by adding a percentage premium to the state's respective average home loan. 

A higher rental yield, high level of future development, lower than average unemployment rate, low crime rates, and a minimum number of sales were also used to analyse the suburbs. 

PRD chief economist Dr Diaswati Mardiasmo said despite having many suburbs with strong affordability and liveability, Sydney and Melbourne posed a risk to low and middle-income workers

"Sydney and Melbourne continue to have the highest entry prices, with the lowest rental yields," Dr Diaswati said.

"This is a similar pattern to the 1st Half 2020 and 2nd Half 2020 reports, despite COVID-19 restrictions and further lockdowns in both capital cities." 

See PRD's 2020 report here.

Brisbane continued to be the capital with the best "bang for your buck" for both investors and owner occupiers, with Hobart starting to price out many home buyers. 

"Parts of Hobart have now overtaken Brisbane in median property prices, some with lower rental yield," Dr Diaswati said.

"This carries a danger for local future first home buyers. Current first home buyers have recently been able to compete thanks to current Government schemes and a historical low interest rate.

"However, with the continuous increase in property prices and no significant supply relief, future first home buyers may be further disadvantaged."


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers. 

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 28, 2021. View disclaimer.


Sydney and Brisbane remain a "first home buyer haven" 

The report analysed access to market, or price point sales, and found Brisbane and Sydney remained the most attractive capitals to first home buyers. 

"The bulk of sales in Sydney (38.6% for house and 49.9% for units) and Brisbane (45.6% for house and 35.8% for units) are in the combined lowest and lower middle price brackets, albeit a significant difference in actual median property prices," Dr Diaswati said.

Melbourne has overtaken Hobart as the least friendly market for first home buyers, with an increasing number of Melbourne sales making up the middle, upper, and premium price brackets. 

Despite its promising access to market and market activity, Dr Diaswati said Sydney remained the most expensive capital for both houses and units. 

"For example, a middle-priced house in Brisbane sits within $700K-$900K, whereas in Sydney it is $1.5M-$2.0M – essentially double the price."

Sydney the most affordable city for liveability

PRD analysed affordability versus liveability in each capital city by finding the percentage difference between the state average home loan and the median unit and house prices in metro areas compared to suburbs within a 20 kilometre radius from the CBD. 

It found Sydney to be the most affordable city for liveability, where residents could purchase a house in a liveable suburb for 87% less than the premium needed to purchase in Sydney Metro. 

Dr Diaswati said the results may seem shocking, but were excellent news for prospective buyers. 

"This is good news for first home buyers, who may believe they have to sacrifice liveability aspects in gaining access into suburbs with a lower median property price than Sydney Metro," she said. 

"This finding may surprise many, as Brisbane and Hobart are originally thought of as the more affordable capital cities.

"Whilst this might be true from a median property price perspective, many affordable suburbs in both capital cities fail to satisfy other criteria such as liveability, investment return, and future project development plans."

Related: Affordable rentals aren't near jobs for low-income workers.


Photo by Nico Smit on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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