The best suburbs for millennials to buy property, according to new report

For millennials, choosing a suburbs is not just about finding the trendiest postcode with the most hipster cafes per capita.

Increasingly, rising house prices, rents and travel costs, as well as the casualisation of work, have meant Generation Y don’t just want to live in areas with good public transport and access to opportunities — they need to.

And with housing becoming steadily more unaffordable in our capital cities, the issue has become a much debated topic between millennials (those born between 1980 and 2000) and their baby boomer parents. Is it impossible to get your foot on the property ladder now, or are young people just not willing to compromise?

“It’s a vexed issue for first home buyers,” says Domain Group chief economist Andrew Wilson. “On one hand, they have what would be undeniably the best lending conditions any homebuyer has ever had … but on the other hand, it’s never been more difficult to save the deposit.”

Dr Wilson says the growth of average incomes has slowed as prices have risen, meaning young people are stung by the continually rising housing market with no equity to bring to the party.

“A generation ago, you needed one strong income, but now you need two strong incomes to save,” he said.

First Home Buyers Australia co-founder Daniel Cohen says the huge price gains, and the soaring deposits now needed, have been a sudden change for Gen Y.

“When we were growing up, property prices were reasonable, but it’s remarkable how much it’s changed even since the early 2000s, when a lot of us were teenagers,” Cohen says.

“There is a perception that Gen Y want everything and won’t compromise, but I think they tend to start off by wanting everything [and] when they realise its not possible, they do cut back until they can find what they can afford.”

Zoe Pointon, chief executive of real estate agent comparison site OpenAgent, says her site’s research shows millennials on the eastern seaboard are making trade-offs in order to achieve the great Australian dream.

These trade-offs include either buying units to stay close to central business districts, or moving to satellite cities for traditional houses.  

“That actually hasn’t changed between generations,” she says. “I’m not saying it hasn’t gotten harder, it has. But if [millennials] asked their parents, they would say, ‘when I bought property I made sacrifices’.”

Considering these trade-offs, a new report from OpenAgent, using data from Microburbs and the Domain Group, has singled out the best suburbs for millennial house hunters.

NEW SOUTH WALES

Newtown

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Median price: $1,285,000 (house) and $755,000 (unit)

Weekly rent: $750 (house) and $500 (unit)

There’s perhaps little surprise hipster haven Newtown is in the crosshairs of many Sydney millennials. Full of cafes, bars and street art, it’s just a short bus or train ride to the CBD.

But first-timers would likely be looking at newly built or off-the-plan apartments and townhouses in the suburb rather than period terraces, with houses about 170 per cent more expensive than units.

Glebe

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Median price: $1,705,000 (house) and $700,000 (unit)

Weekly rent: $850 per week (house) and $530 per week (unit)

On the opposite side of the University of Sydney lies Glebe, another inner-city hub for the young and cool. The report states Glebe scores high on convenience, lifestyle, and the “hipness” factor.

Again, first home buyers will find about $1 million difference between houses and units in the area, so would need to compromise on size and outdoor space to live there.

Parramatta 

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Median price: $877,500 (house) and $580,000 (unit) 

Weekly rent: $505 per week (house) and $460 per week (unit)

About 23 kilometres west of Sydney’s CBD, the report names Parramatta the “geographical centre of Sydney as the city continues to spread out west” and even calls the suburb an “a second CBD”. 

A suburb full of high rises, the median unit price has been kept relatively in check with all the competition. Young buyers can also be spurred on by the growing number of jobs in western Sydney, which will allow workers living in Parramatta better access to such opportunities.

VICTORIA

Newport

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Median price: $895,500 (house) and $585,000 (unit)

Weekly rent: $490 per week (house) and $385 per week (unit)

The inner west has been an affordable pocket for those who want to stay close to Melbourne’s CBD on a budget, but suburbs such as Yarraville and Seddon are now far out of reach for young buyers.

Just 10km from the city, Newport is still comparatively affordable, with the report calling the suburb “up and coming area” for Gen Y to consider purchasing.

Chadstone

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Median price: $935,000 (house) and $690,000 (unit)

Weekly rent: $460 per week (house) and $410 (unit)

For buyers wanting to get into the eastern suburbs market, the report names Chadstone as a solid investment option with good growth opportunities.

There plenty of new and older apartments to choose from in the suburb, which offers access to transport, Monash University and Holmsglen TAFE, and Chadstone Shopping centre.

Geelong

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Median price: $420,000 (house) and $294,500 (unit)

Weekly rent: $330 per week (house) and $270 per week (unit)

Melbourne first home buyers are turning to Geelong because they can still afford a good-sized house in the inner suburbs of the satellite city. Geelong is also beginning to attract young people with trendy cafes and foodie spots in town.

The report highlights the coastal lifestyle potential of the city too, with proximity to the surf coast and Bellarine Peninsula.

QLD

Springwood

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Median house price: $475,000

Weekly rent: $395 per week

Located halfway between Brisbane and the Gold Coast, Springwood is an affordable option for young buyers.

There is considerable development happening in the area, which is keeping prices low, and there’s an IKEA nearby, which is always handy for millennials on a budget.

Eight Mile Plains

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Median prices: $618,058 (house) and $400,000 (unit)

Weekly rent: $450 per week (house) and $423 per week (unit)

Located about 15 kilometres from the Brisbane CBD, Eight Mile Plains is a popular location for Gen Y buyers because of the affordability factor, according to the report.

The suburb also benefits from proximity to Griffith University and Westfield Garden City. 

Bowen Hills

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Median unit price: $430,222  

Weekly rent: $400 per week

A suburb occupied by apartment towers, there’s plenty of choice for first home buyers who want to be close to the city and Fortitude Valley.