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Buyers Are Increasingly Chasing Affordability

Property markets are always evolving and reacting to changes in the economic climate – and the biggest trend currently evident across Australia is that buyers increasing are chasing affordability.

In most of our capital cities, it’s the affordable suburbs where buyer demand continues to be strong. And, at the same time, investors continue to buy in affordable regional locations that offer higher yields to compensate for rising interest rates.

Our quarterly analysis of sales activity for The Price Predictor Index shows there are still many supercharged suburbs and towns with increasing numbers of dwelling sales which will most likely to deliver future price growth – and the majority of these are affordable suburbs.

Within capital cities, buyers are chasing affordability in a variety of ways.

In Brisbane, for example, the market overall has dropped from its peak since the start of 2022, but the cheaper outer ring areas continue to experience high demand.

Within Melbourne it’s the more affordable local government areas that buyers have in their sights.

While Perth and Adelaide are still chalking up strong sales activity overall, it’s the suburbs which offer price points attractive to first home buyers and investors that are leading the way.

When you can buy in a capital city in the $200,000s or $300,000s and get yields above 6% in locations with growth prospects, it’s an attractive equation for property investors.

Another trend emerging in the quest for affordability is an increase in sales of apartments, particularly in suburbs where the price differential is significant compared with houses.

In Sydney buyers are searching for units which allow buyers to secure properties close to the action at prices significantly below Sydney median house price of $1.3 million – in many cases at prices half that level.

Melbourne’s inner city unit markets are in demand and it’s the same in Brisbane, while Canberra continues to be a solid performer with high activity in its unit markets.

In addition to low prices, investors are looking to these locations to secure properties with higher yields to help buffer additional costs through interest rate rises.

The top capital city market with affordable prices and above average rental returns is Darwin, which has the highest median yields of the capital cities of 7% for units and close to 6% for houses.

There are also a number of regional markets which continue to offer investors low prices, good rental returns and solid prospects for capital growth.

Check out our Cheapies with Propsects Bundle to get our Top 10 picks for affordable locations, with strong growth prospects.


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