Australia’s housing recovery has gathered momentum, with combined capital house prices producing the steepest quarter-on-quarter gain since late 2021.
House prices have now risen for nine consecutive months, in many locations making up for all their losses during the 2022 downturn, proving that we’re now well and truly into the next phase of the property market cycle - the recovery phase - after the market bottomed earlier this year.
But the 11-year-high cash rate and tight serviceability requirements at a time when the cost of living is also high places borrowers in a challenging position to qualify for a loan.
Meanwhile, supply is severely constrained.
This is why more and more buyers are searching for the most affordable places to live in Australia, for a way to get onto the property ladder without having to pay bumper prices.
After all, Sydney’s median house price cracked $1.5 million for the June quarter, according to Domain data.
Melbourne and Canberra median house prices still sit over $1 million while Brisbane and Adelaide medians are still $823,000-813,000.
But not every suburb in the country is collecting the same bank-breaking prices for their houses.
Domain data shows there are some much more affordable places to buy - in fact, the 10 cheapest places to buy a house in Australia all have a median price under $180,000.
But first, let me make one thing very clear…
Note: These are definitely NOT areas I’d recommend from an investment perspective because a good investment is the right property in the right location… not just the cheapest around.
The cheapest properties in Australia today will always be cheap properties and suburbs in the future and are unlikely to experience anywhere near the capital growth that better locations will experience.
In fact, these tend to be suburbs where nobody wakes up in the morning and thinks:
Gee, I’d really like to live there!
But it’s interesting to note where the cheapest property in Australia is located because it shows that no matter what point we are in the property cycle, a buyer doesn’t always have to spend hundreds of thousands, or even millions, to get onto the property ladder.
The list of Australia’s cheapest places to buy a house comprises rural suburbs across South Australia, Western Australia, and Queensland.
Unsurprisingly, no city suburbs make the list with all suburbs listed located a fair distance away from a major city.
The most affordable suburb in Australia – Coober Pedy – in South Australia is the only suburb nationwide with a median house price under $100,000.
Coober Pedy, the opal capital of the world, has a median house price of $78,000, a jump of 11.4% over the past 12 months.
In fact, despite their low median house prices, 9 out of the 10 suburbs listed enjoyed a price increase over the past year, some by as much as 45%.
Peterborough was previously the second cheapest suburb in the country (and the only other suburb with a sub-$100k median), but after a 45% boost to a new house price median of $145,000, it has been bumped to 5th place on the list.
|Rank||Suburb||State||Region||Median house price||12-month growth|
|1||Coober Pedy||SA||Country West||$78,000||11.40%|
|2||Kambalda East||WA||Regional WA||$118,525||19%|
|7||Kambalda West||WA||Regional WA||$155,000||2.00%|
|8||Port Pirie West||SA||Country West||$157,000||25.60%|
|10||Mount Morgan||QLD||Qld Rural||$159,904||21.10%|
Source: Domain & CoreLogic data
Now let's break the data down further into each state.
Victoria didn’t feature in the top 10 cheapest places to buy a house across Australia, but it does still have several areas where median house prices are low compared to the state-wide average.
In fact, all the suburbs on the list are located in regional Victoria while the cheapest suburbs close to the city start much higher at around $491,000.
First on the list, with the lowest median house price, is Hopetoun in the state’s northwest around 404 km northwest of Melbourne, with a median value of just $178,811.
In fact, the northwest region dominated the list, with 7 out of the 10 suburbs listed being located in that area.
These areas tend to have small houses on large blocks of land, which might seem appealing but the suburbs generally lack employment opportunities, transport links, or closeby access to amenities.
|Rank||Suburb||Region||Median house price|
|6||Coleraine||Warrnambool and South West||$223,587|
|8||St Arnaud||North West||$268,029|
|9||Casterton||Warrnambool and South West||$274,077|
Three of Queensland’s cheapest places to buy a house are featured on the top 10 most affordable suburbs list nationwide - Charleville, Collinsville, and Mount Morgan.
The trio have median house prices of $150,000, $159,000 and $159,904 respectively.
The most affordable suburbs are spread across Central QLD, the Mackay - Issac - Whitsunday region, Wide Bay, and Darling Downs - Maranoa which are all regional areas of the state.
The most affordable suburb in Greater Brisbane is Russell Island in the east with a median house price of $350,386.
While this is still very affordable for a capital city house median, it’s far higher than what buyers can find in the regional areas listed below.
|Rank||Suburb||Region||Median house price|
|2||Collinsville||Mackay - Issac - Whitsunday||$159,000|
|3||Mount Morgan||Central QLD||$159,904|
|4||Tara||Darling Downs - Maranoa||$165,000|
|7||Dysart||Mackay - Issac - Whitsunday||$182,000|
|9||Jandowae||Darling Downs - Maranoa||$193,768|
|10||Inglewood||Darling Downs - Maranoa||$200,365|
NSW is another state that doesn’t feature on the 10 cheapest places to buy a house in Australia.
And again, the state's most affordable suburbs are all located in regional NSW, although the house prices in the cheapest state in Greater Sydney aren’t much higher.
Warwick Farm Sydney in Sydney’s South West has a median house price of $389,307, which is only $25,000 higher than North Tamworth in 10th place on this list.
In first place is Lavington in the Murray region with a median house price of $251,406, followed closely by Muswellbrook in the Hunter Valley with a $276,387 median house price.
Lavington is the largest suburb of the city of Albury in NSW, while Muswellbrook is in the Upper Hunter Region of NSW, about 243 km north of Sydney.
Interestingly, the nearby suburb of Tamworth features 3 times on the list - Tamworth south, east, and north.
The area is one of the country’s larger cities, with large blocks of land and plans to overhaul its transport links.
|Rank||Suburb||Region||Median house price|
|4||South Tamworth||New England and North West||$285,744|
|6||Armidale||New England and North West||$294,807|
|8||East Tamworth||New England and North West||$305,689|
|10||North Tamworth||New England and North West||$314,043|
Generally, these affordable areas with low median prices are in regional areas where demand is low, land is vast, and amenities and transport links are hard to come by.
As I always say, it’s not just the property – it’s mainly about location.
I believe that location will do about 80% of the heavy lifting of your property’s capital growth.
- Also read:Home Price Growth Still Strong Over November | Latest Housing Market Stats
- Also read:Boom to bust: What makes property prices rise and fall
- Also read:Latest property price forecasts for 2023 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:The Pros and Cons of Property Investment
- Also read:Maximising Property Values: 7 Essential Maintenance Tips for Homeowners
And not all locations are created equal.
Some suburbs will be more popular than others, some areas will have more scarcity than others and over time some land will increase in value more than others.
The suburbs mentioned in the lists above might look like a well-priced investment opportunity but they’re cheap for a reason: location.
And the location is something you cannot change.
That’s why it’s important to buy your investment property in a suburb that is dominated by more homeowners, rather than a suburb where tenants predominate.
And you’ll find suburbs where more affluent owners live will outperform the cheaper outer suburbs where wage growth is likely to stagnate moving forward.
This is because the more established suburbs with better infrastructure, shopping, and amenities tend to be close to the CBD and the water and that’s where the wealthy want to and can afford to live, and they’re prepared to pay a premium to live there.
Overall, by focussing your research on what those often overlooked owner-occupiers are doing, you may just find an investment that outperforms the market and delivers strong value and growth over the long term.
Note: While this is an interesting list to look over, these aren’t areas where I’d recommend investing.
Despite these areas being ‘cheap’, their low median house and unit prices alone aren’t enough alone to warrant a good investment opportunity.
‘Cheap’ property will always be ‘cheap’ so don’t get lured into thinking you’re getting a bargain.
Also, never expect investment-grade returns from secondary locations and properties.