When it comes to affordability, 2 states stand out from the rest

Even with affordability dwindling, these states are home to a collection of regions that offer an entry point onto the property ladder.

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According to the latest PropTrack Affordability Hotspots report, Western Australia and Queensland have emerged as Australia’s affordability havens, with more than half of the country’s affordable regions concentrated in these two states.

The index measures affordability by identifying the share of home sales that households across the income distribution in each state could afford to buy at prevailing mortgage rates. The share of affordable homes that have been identified in each region are defined as falling below the price at which a household would be spending 25 per cent of their gross income on mortgage repayments.

The most affordable capital city region has been identified as Kwinana, in the south of Perth, where 20 per cent of the homes are deemed to be affordable on a median income. Gosnells, Mandurah and Armadale are also found to be Western Australian regions that offer a high level of affordability.

In fact, 41 per cent of regions in Western Australia have a significant proportion of homes that would be considered affordable to those on median incomes, accounting for 25 per cent of the affordable regions across the country.

Meanwhile, Queensland is found to be home to over a third of all regions where a median income household could afford 20 per cent of the homes that have recently been sold.

Three of the Sunshine State’s most affordable capital areas are in the southern Logan-Beaudesert broader region, with a median income Brisbane household able to afford one in five homes in the most affordable Springwood-Kingston region.

Queensland’s outback regions also feature some of the best affordability in the country, with households able to purchase homes in higher proportions than their position on the income distribution. This has contributed to rising prices in these areas in recent years, with Townsville in particular experiencing double-digit price growth over the past 12 months, driven largely by affordability.

As PropTrack senior economist and the report’s author, Paul Ryan, explained, affordable areas are rapidly shrinking across the country, which is greatly contributing to the popularity of regions that are still seen to offer a reasonable price point.

“Affordability remains a key driver of the strength in the Western Australian market, with Perth seeing the strongest price growth of any market over the past year,” Ryan stated.

“Across regional areas, outback regions top the list for affordability. While remote, these regions continue to have high accessibility for households with median incomes, with well above two-thirds of homes considered affordable,” he added.

Ryan commented that the report paints a clear picture of the continuing challenges of the Australian housing market.

“The results from this report quantify the challenging state of housing affordability across the country. Very few regions remain affordable to households earning median incomes or lower, highlighting the role that existing wealth plays in entering home ownership given the high level of prices across the country.”

Looking at the nation’s two largest cities, Sydney is deemed the hardest city in which to buy a home, with only 3.8 per cent of home sales affordable for median income households, while 7.1 per cent of home sales are affordable for median income households in Melbourne.

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