A new report shows that Australia's inner city areas are still host to a number of affordable suburbs despite warnings of overheated housing markets.
New figures from property consultancy RP Data indicate that property still remains affordable in a number of Australian suburbs located in close proximity to capital city CBDs, despite the ongoing surge in nation-wide housing prices.
According to RP Data’s Weekly Property Pulse, which looks at the most affordable suburbs in the country for both houses and apartments within 10 kilometres of the downtown areas of Australia’s state capitals, the cheapest places to buy close to a CBD include Wolli Creek and Eastlakes in Sydney, Bellfield and Carlton in Melbourne, and Rocklea and Tingalpa in Brisbane.
In Adelaide, the most affordable inner-city suburbs include Dry Creek and Kilburn, while in Perth, Glendalough ranked best for the cost of both houses and apartments.
Up north, the cheapest inner-city suburbs in Darwin are Malak and Alawa, while at the opposite end of the country, Clarenden Vale and Glenorchy are the most affordable suburbs within a reasonable distance of the Hobart CBD. In the nation’s capital, the Page and Hughes suburbs ranked as the most affordable inner city-areas.
The median prices of residential property in these suburbs varies tremendously, however, even between Australia’s populous cities. In Sydney’s Wolli Creek, the median house price is a hefty $710,303, making the figure of $533,252 for Melbourne’s Bellfield appear a steal by comparison.
RP Data said that while buyers may have lingering reservations about the safety of some of these inner-city suburbs, their proximity to their respective CBDs will always be a source of appeal, making them prime candidates for urban renewal in the near future.
Even these relatively inexpensive suburbs do not appear likely to remain affordable for much longer, with RP Data’s home Value Index for July 2014 indicating that combined home values for capital cities surged by 10.2 per cent in the past year. Sydney and Melbourne posted the biggest increases, at 14.8 per cent and 11.0 per cent respectively.
Some experts warn that Australia’s housing market could be significantly overheated as a result of loose credit policies. Jeremy Lawson, a former senior economist with the Reserve Bank of Australia, estimates that home prices could be 20 to 30 per cent overvalued as a result of the bank’s willingness to accommodate rapid credit growth.
RP Data’s latest report also shows that the rising cost of houses is boosting demand for apartments in inner city areas due to their lower median price levels, serving to drive the construction of large apartment complexes in those suburbs closest to CBDs.