Housing crisis: Pool of affordable suburbs dwindles as house prices rise

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Rapid house price increases in the past year has sparked a sharp decline in the proportion of affordable house markets across Perth, Brisbane and Adelaide.

Already a subscriber?The sharp rise in Perth’s house prices has sparked a four-fold drop in the proportion of affordable suburbs in the city in the past 12 months, pricing more homebuyers out of the market, data from CoreLogic shows.

The dramatically shrinking pool of affordable suburbs highlights how the tight supply of new homes, held back by high building costs, combined with high borrowing costs are proving insurmountable for a new generation of first-home buyers.has halved to just 5.5 per cent in the past year but only fell slightly to 28.5 per cent from 29.6 per cent of all suburbs in Melbourne.

CoreLogic considers a suburb affordable if the median house price does not exceed $900,000 in Sydney, Melbourne and the ACT. For the rest of the capitals, the cut-off is $600,000.

“I expect values to continue rising, maybe not at this pace, but at least more than 1 per cent through the next three to six months.” Median house values in Swan suburbs Aveley, Ballajura, Bennett Springs, Caversham, Jane Brook and Kiara also crossed the $700,000 mark from their affordable price points of around $550,000 a year ago.

 

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