With property values in many Australian locations increasing by close to 20% so far this year many first homebuyers, in particular in New South Wales and Victoria are struggling to find affordable locations in their home state creating demand in other states.
Research by mortgage broker platform Hashching revealed where first home buyers are finding their way onto the housing ladder.
Queensland has become a sanctuary for first home buyers with Toowoomba standing far above all others with 20% of all Queensland first home buyer transactions taking place there.
Nearby St Aubyn takes second place with 4% of transactions, bringing the area to a whopping 24%.
The bronze medal is awarded to the distant Walliebum with 2% of transactions.
New South Wales is effectively the polar opposite of Queensland.
In NSW, first home buyers are the least concentrated of all Australian states – Pemulwuy is the only one to pull away from the pack, but that’s with just 2% of first home buyer transactions taking place here.
All other postcodes do not individually represent over 1% of the total.
Victorian first home buyers will be able to sympathize with their NSW counterparts, with the joint spot technically shared by two postcodes: Devon Meadows and Roxburgh Park who both represent a tiny 2% of transactions each.
Many postcodes however share similar totals across many different areas, so as with NSW, there are no clear first home buyer sanctuaries to be found here.
In the ACT, Dunlop takes the top spot, with 11% of all transactions, followed very closely by Kambah and Amaroo with 10% each.
First Home Buyers in the ACT are being pushed to the outskirts of Canberra, in all directions.
South Australia sees Port Lincoln lead the pack with 8% of transactions, a promising sign for the growing town.
South Adelaide suburbs Flagstaff Hill and Ascot Park share second, with 6% of transactions each in the state happening there.
West Australia’s first home buyer capital might come as a surprise: Bunbury with 6% of overall transactions.
Outside of Bunbury, first home buyers are finding opportunities in northern Perth, with Pearsall representing 5%, while neighbouring Mullaloo represents of transactions.
Tasmania is the most concentrated market of all, with the top three consisting of neighbouring Hobart postcodes. Lenah Valley took 12% of transactions, with neighbouring North Hobart a close second at 11% and Tranmere across the bridge coming third with 9%.
Hasching CEO Arun Maharaj said,
“Before beginning the analysis, we had a hunch we’d see high levels of concentration when it comes to first home buyers.
The group has the most in common with each other – younger, lower budgets and often employees over self employed.
This would lead to areas with a sweet spot of good commuting options into capital cities, affordable housing and/or nearby recreational areas seeing high transaction numbers.”
This hunch was broadly correct for Queensland, Tasmania, West Australia, South Australia and the ACT . However, in Victoria and New South Wales, it’s a different story.
The wide range of postcodes in NSW and VIC suggests only one thing: market failure.
The housing market has not created appealing centres of entry-level property for this embattled group.
This results in buyers choosing to save more and compete with buyers higher up the ladder rather than relocate, or to choose to purchase their first home elsewhere.
From the data, it looks like Hobart is the prime beneficiary of this trend, which saw high first home buyer activity in centralised locations, with Adelaide’s southern postcodes also seeing significant activity, which suggests first home buyers are finding refuge there from other states.”
What’s happening in Queensland however shows that there is hope.
With such a massive percentage of first home buyers choosing Toowoomba and its surrounds, the city can pride itself on creating the right mix of affordable housing, employment opportunities and transport to tempt first home buyers to start their journey there. NSW and VIC should take notes.
You can’t help but have sympathy for first home buyers in these two states.”
Total no. FHB transactions
Australian Capital Territory
New South Wales
TAKE OUR 3-MINUTE SURVEY: How do you compare to other property investors?