The suburbs where you can get on the property ladder quickly, using only a 5 per cent deposit

March 31, 2022
The government has extended its scheme that helps first-home buyers get into the market sooner, but you'll need to know which suburbs to be looking in to qualify. Photo: WJ Tobin Real Estate

The federal government’s budget delivered good news this week to all the aspiring homeowners who watched as house prices rose at record rates last year and wondered how they could ever possibly save enough for a deposit to crack the market.

The government is expanding its scheme that allows first-home buyers to purchase a property without having to save a 20 per cent deposit or take out lender’s mortgage insurance.

The idea is it gets you into the property market sooner because the deposit you need to save is only 5 per cent, rather than 20 per cent.

Domain’s recently released First Home Buyer Report found the time it takes a young couple to save a 20 per cent deposit for an entry-level house has blown out to record levels across the nation – it now takes, on average, five years and eight months to save for a house in a capital city.

Using the government’s First Home Loan Deposit Scheme, now rebranded as the Home Guarantee Scheme, young buyers can slash the time it takes to save for a house in a capital city to just one year and one month.

Area Time to save without using govt initiatives Time to save using scheme with 5% deposit
Sydney 8 years, 1 month 2 years
Melbourne 6 years, 6 months
1 year, 7 months
Brisbane 4 years, 10 months
1 year, 3 months
Adelaide 4 years, 7 months
1 year, 2 months
Perth 3 years, 7 months 11 months
Hobart 5 years, 10 months
1 year, 5 months
Darwin 4 years, 3 months 1 year
Canberra 7 years, 1 month
1 year, 9 months
Combined capitals 5 years, 8 months
1 year, 5 months
Combined regionals 3 years, 10 months 11.5 months
Australia 4 years, 5 months 1 year, 1 month

Source: Domain

But the Home Guarantee scheme has its limitations.

Single applicants can only have earned a taxable income of up to $125,000 per annum for the previous financial year, and couples only up to $200,000. You also have to be buying a home to live in, not an investment property.

Perhaps the biggest limitation is the price caps, which dictate how much you can spend on your property in order to qualify for the scheme. The price caps vary depending on the city or regional area you’re buying in, and also whether you’re buying a brand new property or existing property.

The price caps also vary from capital city to capital city:

Sydney $800,000
Melbourne $700,000
Brisbane $600,000
Hobart $500,000
ACT (Canberra) $500,000
Perth $500,000
Darwin $500,000
Adelaide $500,000

Source: NIFIC

With median house prices being substantially more than the price caps in cities like Sydney, Melbourne, Canberra, Hobart and Brisbane, finding a property that qualifies – without moving 50 kilometres from the city centre – can be challenging.

Here’s our pick of the suburbs in which to buy if you want to qualify for the scheme.

SYDNEY

Sydney’s median house price is now $1.6 million on Domain data, having risen by $400,000 last year alone.

Finding any house under $800,000 is a tough gig and while the suburbs with median house prices in this range are all in the western or south-western suburbs, some are less far-flung than others.

Suburb Postcode Region Median price
Distance to CBD
Glenfield 2167 South West $771,500 31km
Doonside 2767 West $761,000 33km
Bardia 2565 South West $769,000 34km
Glendenning 2761 West $775,000 35km
Plumpton 2761 West $760,000 36km
Oakhurst 2761 West $781,000 37km

Source: Domain. Median price based on the Dec '21 quarter.

Glenfield, with a median price of $771,500, is 31 kilometres, or about a 45-minute drive, from the city centre, while Doonside, with a median price of $761,000, is 33 kilometres out – about a 40-minute drive.

Contact Agent!
12 Foreman Street, Glenfield NSW 2167
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The median price for a unit in Sydney is $802,255 – much closer to the price cap – which means there is far more choice in location for buyers who opt to buy a unit using this scheme.

There are plenty of suburbs with median unit prices within the cap limit, from the upper north shore to the inner west, the south and even the city centre, although they will be closer to the $800,000 mark than suburbs further out.

Suburb Postcode Region Median unit price Distance to CBD
Ultimo 2007 City and East $781,500 1.6km
Stanmore 2048 Inner West $736,500 4.8km
Leichhardt 2040 Inner West $775,250 5.2km
Petersham 2049 Inner West $770,000 5.7km
Marrickville 2204 Inner West $795,000 6.8km
Gladesville 2111 Lower North $760,000 8.8km
Hillsdale 2036 City and East $687,500 9.4km

Source: Domain. Median price based on the Dec '21 quarter.

While units in Wiley Park and Lakemba have median prices of less than $400,000, first-home buyers will find units in central locations such as Ultimo, only 1.6 kilometres from the CBD, and Leichhardt, just 5.2 kilometres away, or Hillsdale, in the eastern suburbs and 9.4 kilometres from the city centre.

SOLD - $1,010,000
1207/39 Rhodes Street, Hillsdale NSW 2036
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MELBOURNE

House prices rose by about $170,000 in Melbourne last year to a record median of $1.1 million. Finding a house under the government’s price cap of $700,000 is a stretch, and many of the suburbs within that price range are a fair ride from the city centre.

Suburb Postcode Region Median price
Distance to CBD
Sunshine North 3020 West $696,800 13km
St Albans 3021 West $668,000 17km
Westmeadows 3049 North $660,750 18km
Roxburgh Park 3064 North $615,000 22km
Caroline Springs 3023 West $696,500 22km
Sydenham 3037 West $650,500 22km

Source: Domain. Median price based on the Dec '21 quarter.

Sunshine North, with a median house price of just under $700,000, is only 13 kilometres from the CBD and about a half-hour drive in the car. St Albans is another five minutes away by car but cheaper still, with a median price of $668,000.

SOLD - $660,000
1 Maroondah Court, St Albans VIC 3021
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Melbourne’s unit prices did not rise by nearly as much as houses last year and many are well within the cap of $700,000. The median price for a unit is now $593,387 on Domain data, and there are many suburbs to choose from in inner-city locations.

Sought-after suburbs like Malvern East and Caulfield have median unit prices under $700,000.

Suburb Postcode Region Median price
Distance to CBD
South Melbourne 3205 Inner Urban $648,000 1.5km
Cremorne 3121 Inner Urban $625,500 1.9km
Carlton 3053 Inner Urban $388,000 2.7km
Collingwood 3066 Inner Urban $640,500 2.9km
St Kilda West 3182 Inner Urban $610,000 3.6km
Armadale 3143 Inner Urban $680,500 5.4km
Travancore 3032 West $379,000 5.8km
Northcote 3070 North East $631,250 6.3km

Source: Domain. Median price based on the Dec '21 quarter.

The mass exodus of international students from Melbourne’s CBD as the international borders closed during the pandemic, as well as locals who fled the locked-down city to regional areas, saw unit prices fall in some inner-city locations last year.

West Melbourne, St Kilda West, Brunswick West and Glen Iris all had price falls last year, placing them well under the $700,000 cap.

Cremorne and South Melbourne, both within walking distance of the CBD, have median unit prices under $700,000.

SOLD - $700,000
321/85 Market Street, South Melbourne VIC 3205
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BRISBANE

A cap of $600,000 would have sounded generous before the pandemic – Brisbane’s median house price in December 2020 was just under $630,000.

Fast-forward to 12 months later and the median house price had shot up to nearly $800,000, making house-hunting at less than $600,000 exponentially more difficult.

First-home buyers searching for a house in Brisbane using the government’s scheme with just a 5 per cent deposit are going to have to open their minds to suburbs they may not have otherwise considered.

Suburb Postcode Region Median price
Distance to CBD
Hemmant 4174 Brisbane East $595,000 10km
Acacia Ridge 4110 Brisbane West $505,253 12km
Fitzgibbon 4018 Brisbane North $569,500 14km
Inala 4077 Brisbane West $430,500 14.8km
Thorneside 4158 Bayside South $510,000 17km
Forest Lake 4078 Brisbane West $547,000 17km
Capalaba 4157 Brisbane East $600,000 19km

Source: Domain. Median price based on the Dec '21 quarter.

Amazingly, Hemmant, in Brisbane’s eastern suburbs, has a median house price of less than $600,000 – and it’s just 10 kilometres from the CBD.

Other options include Acacia Ridge on the south side, Fitzgibbon on the north side, and Capalaba and Thorneside, also in the east.

SOLD - $760,000
18 Montana Drive, Capalaba QLD 4157
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When it comes to finding a unit under the price cap of $600,000, Brisbane first-home buyers are spoilt for choice.

Some of the city’s most sought-after suburbs, including Ascot, Paddington and St Lucia, all have median unit prices under the $600,000 cap.

Suburb Postcode Region Median price
Distance to CBD
Brisbane City 4000 Brisbane North $505,000 0km
South Brisbane 4101 Brisbane West $535,000 1km
Kangaroo Point 4169 Brisbane East $565,000 1.2km
Fortitude Valley 4006 Brisbane North $437,000 1.7km
Paddington 4064 Brisbane West $580,000 2.4km
Kelvin Grove 4059 Brisbane West $455,000 2.6km
East Brisbane 4169 Brisbane East $438,500 2.6km

Source: Domain. Median price based on the Dec '21 quarter.

First-home buyers can take their pick of apartment locations in chic inner-city locations like Fortitude Valley or, if they want more suburban options, suburbs like Ashgrove and Coorparoo also fall beneath the cap.

SOLD - $495,000
1/102 Rockbourne Terrace, Paddington QLD 4064
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PERTH

Perth is Australia’s most affordable capital city, with a median house price of $612,348. House prices rose there last year by 7.5 per cent, although its rate of growth was modest compared to the other capital cities which saw double-digit growth.

A price cap of $500,000 puts houses within reach for first-home buyers who want to take up the government’s scheme. A 5 per cent deposit on the maximum price a Perth buyer could pay would be just $25,000.

Better yet, many of the suburbs that fall on or under that $500,000 cap are within close proximity of the CBD.

Suburb Postcode Region Median house price
Distance to CBD
West Perth 6005 City $500,000 1.4km
Highgate 6003 City $475,000 1.9km
Rivervale 6103 South East $495,000 5.4km
Tuart Hill 6060 North $460,000 6.6km
Belmont 6104 South East $490,000 6.9km
Osborne Park 6017 North $414,000 6.7km

Source: Domain. Median price based on the Dec '21 quarter.

West Perth and Highgate are within walking distance of the CBD, and suburbs like Belmont and Osborne Park are less than 7 kilometres from the city centre.

SOLD - $265,000
43 Grenville Street, Tuart Hill WA 6060
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ADELAIDE

Adelaide is currently the hottest property market in the nation, with demand for homes still well outstripping supply.

The median house price soared by nearly $160,000 last year to a record price of $731,547 – and that price is highly likely to have continued to rise into 2022, given the city’s strong auction clearance rates that have been topping every other capital city this month.

A Home Guarantee Scheme cap of $500,000 goes nowhere near as far as it would have pre-pandemic, but there are still suburbs within 10 kilometres of Adelaide’s CBD where the house median sits below that price point.

Suburb Postcode Region Median house price
Distance to CBD
Ascot Park 5043 Adelaide Metro South $500,000 7km
Lightsview 5085 Adelaide Metro West $495,000 7.8km
Kilburn 5084 Adelaide Metro West $480,000 7.8km
St Clair 5011 Adelaide Metro West $485,000 8.7km
Northfield 5085 Adelaide Metro West $500,000 9km
Mansfield Park 5012 Adelaide Metro West $485,000 9km

Source: Domain. Median price based on the Dec '21 quarter.

Most of them sit west of the city centre, with suburbs like Lightsview, Kilburn and St Clair falling under the $500,000 mark, but it’s Ascot Park, south of Adelaide’s CBD, that is the closest in proximity to the city centre.

SOLD - $460,000
9 Parna Lane, Lightsview SA 5085
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Family-orientated Mansfield Park with its large homes and leafy parks sits only 9 kilometres from Adelaide’s CBD.

HOBART

The picturesque capital of Australia’s Apple Isle was once a haven for first-home buyers seeking relief from the heady real estate prices of its mainland city counterparts but these days it’s one of the toughest housing markets to crack.

After Canberra, Hobart had the highest rate of house price growth in the entire nation last year. Within the space of 12 months, prices rose by more than $193,000.

The house median is now $752,110, so a cap of $500,000 on property purchases for first-home buyers leaves only a small choice of suburbs within commuting distance of Hobart’s city centre.

Suburb Postcode Region Median house price
Distance to the CBD
Risdon Vale 7016 Clarence $402,000 8.9km
Rokeby 7019 Clarence $500,000 9km
Bridgewater 7030 Brighton $371,000 19km
Brighton 7030 Brighton $451,561 21km
New Norfolk 7140 Derwent Valley $420,000 24km

The suburb closest to the CBD is Risdon Vale, closely followed by Rokeby, although the supply of houses currently listed for sale is slim.

SOLD - $449,000
5 Fontain Circle, Rokeby TAS 7019
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Further out from the city centre are suburbs like Bridgewater, Brighton and New Norfolk, all with median house prices under $500,000.

SOLD - $425,000
58 Scott Road, Bridgewater TAS 7030
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