Houses out of reach for Canberra first home buyers: report

Canberra’s first home buyers may have to settle for an apartment or townhouse with the Great Australian Dream of a house further out of reach.

Not one ACT suburb is considered affordable for entry-level buyers seeking a standalone property, according to new Domain Group data.

The First Home Buyers Report released on Friday reveals the suburbs in Australia’s capital cities that are most affordable for first home buyers, split into houses and units.

Canberra is one of only two capital cities that did not produce one affordable suburb for a house, alongside Darwin.

Domain and Allhomes data scientist Nicola Powell, who crunched the numbers, said she was surprised not one ACT suburb made the cut.

“I thought the list would still have some affordable suburbs in Belconnen, particularly Charnwood – it wasn’t far off but it didn’t meet that criteria,” she said.

“It really does highlight how unaffordable it is for first home buyers entering the housing market.”

Apartments are still in reach with the Belconnen suburb of Hawker topping the list of the national capital’s 20 most affordable suburbs for units.

Median prices in the report are based on residential sales over the 12 months to March.

The median price cut-off for affordability took into account the size of the average ACT first home buyer loan (based on March ABS data), the recommended 20 per cent deposit, and the ACT’s first home owner grant.

Not one Canberra suburb fell within the median house price cut off of $403,969.

Dr Powell said a unit or townhouse was becoming the only realistic option for many first-time buyers trying to get a foot on the property ladder, particularly those saving for the ideal 20 per cent deposit to avoid mortgage insurance.

“A lot of first home buyers struggle with saving the deposit given the everyday costs of living are growing,” she said.

“We need to start rethinking what our picture of a first home is.”

Luisa Solar has taken on a similar outlook, purchasing a one-bedroom apartment in Geocon’s Republic development in Belconnen a few months ago.

The 23-year-old said she couldn’t afford a house but was keen to step onto the property ladder as soon as possible.

“Buying a house is never really going to be something I can do on my own at this stage in my life,” she said.

Ms Solar plans to live in her apartment and then eventually rent it out when it comes time to move on.

“I definitely thought having a first property would help me down the line so I can eventually buy a house.”

Units and townhouses are still in reach with 29 Canberra suburbs making the cut.

The most affordable suburb, Hawker, has a median unit price of $277,500, followed by Hackett at $286,500 and Hughes at $318,000.

For those set on buying a house, all hope isn’t lost, Dr Powell said.

“The great thing about the ACT is we have very close regional areas that offer affordability only a short drive away, particularly the greater Queanbeyan area,” she said.

Dr Powell said it was worth weighing up all options, particularly given the NSW first home buyers grant ($10,000) is more generous than the ACT’s ($7000).

Housing Industry Association ACT and surrounding NSW executive director, Greg Weller, said one issue affecting housing affordability was the cost of land and associated charges.

“In real terms, the cost of building a house is the same as it has always been,” he said.

“The real drivers of cost are the cost of land and government taxes and charges.”

Mr Weller said some first-timer buyers preferred higher-density living closer to town centres where there was more activity and amenity.

Others were purchasing apartments as investment properties.

Dr Powell encouraged first-time buyers to save as best they can but warned against biting off more than one can chew.

“Know your limitations – it’s so easy to overextend and push yourself.”

Top 10 most affordable suburbs: Canberra units

(Cut off median price: $403,969)

1. Hawker, Belconnen, $277,500

2. Hackett, Canberra Central, $286,500

3. Hughes, Woden Valley, $318,000

4. Phillip, Woden Valley, $327,500

5. Gungahlin, Gungahlin, $344,000

6. Macgregor, Belconnen, $345,000

7. Greenway, Tuggeranong, $350,000

8. Watson, Canberra Central, $350,000

9. Franklin, Gungahlin, $355,000

10. Holt, Belconnen, $358,500