Affordability, particularly at the lower end of the market, has continued to be a concern among both tenants and buyers as the property market has lifted across the country, with concerns that first home buyers will be priced out of property in the future.
While the headlines focus on the $1M plus median house price across Sydney, Melbourne and even parts of Brisbane, more locally in Cairns the concern remains as housing has risen by similar percentages, if not absolute dollar terms. Where there used to be plenty of opportunities to find a starter home in the $250,000 - $350,000 range across many Cairns suburbs (particularly CBD fringe and on the south side), gears have shifted and a sub $300,000 house is a rarity that more likely than not has “renovator’s delight” plastered across the heading. Count on $400,000 being a more likely target. A brand new home, which has long been the first home buyer’s vehicle of choice thanks to generous government incentives, has also seen its cost lift between higher prices for land and those rising building costs. In early 2019 you could find a house and land package for $400,000 in Bentley Park, Edmonton, Mount Peter or Gordonvale. Today? Figure on a $450,000 start, and that’s for a much smaller home than you would have had before. $500,000 is closer to the mark for a like-for-like comparison.
Now, while this might seem like pretty gloomy news for home buyers (if not for home sellers), there are segments of the market which still offer great value – apartments.
Prices have still moved when it comes to units, but between the low base prices most started from and a lesser overall rise, you can still get a lot of bang for your buck – and a quicker entry to the property market, with that time saved potentially equalling money too if it means not paying rent.
An entry level 2 bedroom apartment or townhouse can still be found in the low $200,000s in (or even high $100,000s) across a number of areas, particularly the infamous(ly good value) “M” suburbs. Body Corporate fees are the biggest consideration at this end of the market – as the difference between $3,000 and $6,000 in fees a year is not insignificant, but as long as it translates to value (i.e. well maintained grounds, good common facilities etc.) then its not world-ending. Apartments can also offer access to suburbs that might otherwise be out of reach – think $400,000 for a 3 bedroom townhouse in Stratford compared to a median house price closer to $700,000.
Tom Quaid is the REIQ Zone Chair for Cairns