Buying a house in Australia for under $500,000 might seem to be mission impossible, but there are desirable properties to be found – as long as you are prepared to stop thinking that Sydney or Melbourne are the centre of your real estate universe.
According to a recent study by view.com.au, only one per cent of homes in Sydney can be bought for under $500,000. In Melbourne, only 25 per cent (or 13,000) of properties for sale in the same 12 months to July were under that magic number.
We asked the company’s head of data and analytics, Kent Lardner, where bargains could be found outside the big cities and the news is surprisingly good – so long as you are prepared to hit the highway.
And Lardner knows this firsthand, having made the lifestyle choice to sell his inner-city Sydney house several years ago. “A 220 square metre house in Balmain was not family friendly,” he says.
Lardner and his wife found themselves in what has now become the new hipster haven of Newcastle, two hours’ drive north of Sydney.
“It was a lifestyle decision,’’ Lardner says.
He got rid of his mortgage, traded two bedrooms for four and the change allowed his wife to stay at home with their two primary school aged children and save on the costs of day care.
His job means he flies to Melbourne during the week and once a fortnight he gets up at the un-hipster hour of 3.30am for the two-hour drive to Sydney and returns home by 6.30pm.
It’s tough, Lardner agrees. “But not as tough on the kids and my wife.”
He says first home buyers, young families, retirees and property investors should target centres within commuting distance of capital cities but the costs of commuting had to be factored in.
Lardner’s cardinal rule is to move somewhere with a rail link to the city. “Otherwise one bottleneck or accident and your commute is in trouble,” he says.
So where should you look? Within one to two hours from Sydney, in the Central Coast or Newcastle approximately 15 per cent of houses can be found for under $500,000 while the median price for those two centres is around $640,000.
Wollongong is also within 80 minutes of Sydney and, depending on which suburb you choose, there are houses ideal for first home buyers for under $500,000.
While you can still buy a house under $500,000 in outer Melbourne, there might be more appeal in buying in a small city such as historic Ballarat, an 80-minute drive away where the median price is only $354,000.
Geelong, a similar distance from Melbourne as Ballarat, has a median house price of $483,000. In the past 12 months more than 2500 homes there sold for under $500,000.
Lardner says these towns, like Newcastle, offer the same amenities and coffee shops as can be found in the big city’s inner suburbs, but if you are wedded to a capital city location then the best bet by far is Brisbane.
Outside a five-kilometre radius of the centre, Brisbane still offers plenty of choices for first home buyers with 43 per cent of homes sold last year for under $500,000.
“So that’s our number one choice,’’ says Lardner.