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Declining prices in many Australian property markets have not made it easier to buy close to city centres, new research by Herron Todd White has revealed.
The recent market dips have failed to open up areas of cities that were previously inaccessible to all but the top-end of buyers, property experts said.
Sydney and Melbourne have had the biggest falls in prices but in the wake of the strongest price growth over the past five years.
“We want to give people an idea of where the median price sits now. There’s a lot of talk about the market going backwards which it has, but if you take a medium-term outlook it’s done quite well,” Herron Todd White’s Sydney residential director Matthew Halse said.
“Some areas are performing better than others, like the regional areas, which are doing okay.
“If you’re looking at the east coast, which is the lion’s share of the population, it’s a similar story.”
Finding an affordable property in pricey Sydney would be a challenge, Mr Halse said.
Even finding a property for the median price wasn’t easy, with the Herron Todd White research putting the Sydney median at $955,000.
Buyers had to make some compromises in the inner-city suburbs if they were to find anything close to $1 million.
“Where you buy will be decided by your buyer profile. If you’re a family it will be western Sydney,” Mr Halse said. “If you’re a young professional couple, you might look in the inner west where you can get a reasonably basic, attached, two-bedroom terrace dwelling.”
An attached terrace at 3 Goodman Street Surry Hills sold for $950,000 late last year.
It was a similar story in Melbourne, where the Herron Todd White median was $833,321 at the end of last year. Homes could be found at, or below, that price in many areas of the city, Domain economist Trent Wiltshire said.
“In some of the middle-ring suburbs you might be able to find a property for the Melbourne median,” he said. “Maybe the inner north-west but definitely not in the inner east.”
Houses could be found for about the median price in suburbs like Pascoe Vale, where a 1950s four-bedroom home sold for $800,000 in January.
Mr Halse said the western suburbs would give buyers their best chance of finding a house for below the Melbourne median price.
“An example is the western suburbs, in a place like Point Cook the median is $600,000 and you can get a four-bedroom, two-bathroom detached house as opposed to the inner ring where you’re looking at substantially smaller dwellings on very small lots,” he said.
Brisbane’s urban sprawl contributes to a relatively low median house price of $550,000 compared to other east coast capitals, especially Canberra, which is a smaller city, the research found.
Mr Wiltshire said cities like the Sunshine and Gold Coasts, which aren’t counted while calculating the median, added to the complexity of the Brisbane market.
“The Brisbane median is odd because it is such a large area,” he said. “With prices increasing on the Gold Coast and the Sunshine Coast, Brisbane houses have become relatively affordable.”
Several middle-ring suburbs fall within that price range, Mr Halse said.
“Chermside and Kedron. For about that price you can get three beds, one bath and an older style home,” he said. “If you look south in the middle ring you can find something in Holland Park and Carina.
“You could get a three bedroom home that needs a bit of work but is tidy and livable.”
Like most cities, Canberra’s inner areas have higher prices, concentrated around the CBD.
Mr Wiltshire said the national capital differed from other cities due to its relative accessibility to the city centre from all areas of the territory.
“Due to Canberra’s geography it’s not a long drive to a middle or outer suburb with affordable houses,” he said.
Mr Halse put Canberra’s median at about $800,000, which can get buyers a four-bed, two-bathroom home on the fringes of the ACT, but still only a 20-minute drive from the city centre.
Investor interest and housing affordability have driven the Hobart market in recent months, moving the median price for both houses and units almost to parity, according to Mr Halse’s figures. This is exceedingly rare in Australian capital cities.
“It’s approaching the peak of the market down there. The median was about $680,000 in February. Interestingly the median unit price is $630,000. That’s a close gap.”
For the $680,000 figure, Mr Halse said there were plenty of options close to the city.
“In South Hobart, you can get a mostly brick and tile home with two beds, one bathroom. Neat and tidy but possibly needs some updates,” he said.
“If you want to get away from the CBD you can go to Lena Valley. That’s a three-bed, two-bath, Federation-style cottage.”
Adelaide is the quiet achiever of the Australian capitals, so far avoiding major price rises and analogous contractions. Mr Halse calls it a “very flat city”.
“They’re in a rising market. It’s had an increase from September to December which makes it unique for a capital city in Australia.
“While the median is $480,000 if you’re looking in the inner ring it can be quite difficult to buy for that. You’re probably looking more outside that inner ring in suburbs such as Hillcrest.
“You can get a 1960s fibro-clad dwelling on 800 square metres for about $470,000. That’s a big block, in the north-east.”
The west-coast capital’s property prices have taken a battering following the mining downturn and haven’t recovered since.
“They’re still approaching the bottom of the market,” he said. “[The median is] $505,000 for the wider Perth area. There are suburbs that share that median house price, Munster, Edgewater Osborne Park and Harrisdale.
“St James is seven kilometres south-east, and the median there sits just above $525,000; you can get a three-bed, one-bath on 680 square metres with two car spaces.”