Capital city house prices within reach of first-time buyers

The reality of buying a house at the bottom of the market, or at an entry-level price, can sometimes be a confronting experience.

The most affordable houses in a capital city usually come with any number of compromises – and while buyers already know location is often just the starting point, it can still be difficult to pinpoint where the entry-level homes are before anyone else does.

Competition at the lower end of the market is notoriously strong, so experts say the key to securing a house on a tight budget is knowing exactly where to look, and considering older properties.

Domain has rounded up some of the best examples of entry-level properties on the market.

Entry-level houses in Sydney

While Sydney has a median house price of $1.6 million, the price of an entry-level house based on the 25th percentile is $990,000, according to the Domain First Home Buyer Report.

It’s still possible to buy a house with a budget of $990,000 or less, says buyer’s agent Debra Beck-Mewing of The Property Frontline.

“[A $990,000 budget] is very realistic. Of course, you wouldn’t be buying something within 10 kilometres of the CBD,” she says. “From Auburn outwards, easily into the Campbelltown area and the Penrith Council suburbs.

“The thing that people need to realise is that they shouldn’t just think, ‘Oh, this suburb is going to be too expensive because of the median,’ because you can often pick up properties that have got some little issue, or those rare opportunities if you keep your eye on suburbs closer in [to the city].

“You really just have to be filtering through the properties quite often to find a bargain.”

In a place like Western Sydney, finding a three or four-bedroom house for less than $900,000 is possible, Beck-Mewing says. Check out the following two options as an example of availability in Sydney.

43 Noumea Street, Lethbridge Park, NSW 2770

This red-brick Lethbridge Park house sits on a 632-square-metre block and has four bedrooms, two bathrooms and plenty of parking space. At the rear is an oversized shed that could be used as storage or a workshop. It even has a functional fireplace, perfect for winter.

31 Lawn Avenue, Bradbury, NSW 2560

This white weatherboard Bradbury home has five bedrooms and one bathroom on a 607-square-metre block of land. It is on a single level, which is excellent for families who dislike stairs.

Entry-level houses in Melbourne 

With Melbourne prices tanking, Beck-Mewing advises buyers to use an abundance of caution when considering property in this location. On the flipside, Melbourne has become one of Australia’s easiest capital cities to break into as a first-time buyer.

The cost of an entry-price house based on the 25th percentile in Melbourne is $670,000, according to Domain data.

Just like all capital cities, the further out you look the more value you will find.  Consider areas such as Pakenham, Warragul, Melton, Rockbank, Mickleham Kalkallo, Hoppers Crossing and Drouin.

“Of course, first time buyers need to be realistic about what their first property will look like,” said Beck-Mewing.

“While it can happen in rare cases, most first timers won’t be buying their forever home as their first home. It’s basically a step on the ladder to get into the market, then an opportunity to build your equity for whatever’s next.”

“And that’s why I worry about first time buyers purchasing in Melbourne – the equity might be a very long time coming, so I would advise buyers in that market to negotiate hard and get a great deal to start with.”

Options for Melbourne Include the following.

13 Hanley Court, Pakenham, VIC 3810

For less than $650,000, you can secure this three-bedroom house on a 710-square-metre block of land. This Pakenham red-brick house features two bay windows and plenty of living and dining space. The main bedroom has a walk-in wardrobe, and the other two bedrooms have built-in robes. 

20 Lorimer Street, Melton, VIC 3337

This recently renovated two-story brick house has six bedrooms and two bathrooms. It sits on a 581-square-metre block of land and has plenty of outdoor space, easily accommodating a pool or a trampoline. This home is excellent for people with big families or a need for multiple hobby rooms. 

Entry-level houses in Brisbane

In Brisbane, it has become more challenging for a first-time buyer to buy a house on a tight budget.

Beck-Mewing believes it’s now going to be impossible for first time buyers to purchase closer into the city centre.

“However, it’s still possible in Moreton Bay, Logan and Ipswich. In the Redlands, it’s tricky but first-time buyers can be lucky if they stay on top of their search,” she said.

The cost of an entry-level house based on the 25th percentile in Brisbane is $735,000, according to Domain data.

Options for a Brisbane purchase

110 Aspinall Street, Leichhardt, QLD 4305

This two-level house offers plenty of space for everyone in the family. It has three bedrooms, a sunroom, a study space, plenty of storage and a rumpus area. It’s also a few minutes from Wulkuraka Station and several state schools.

4 Red Gum Street, Ripley, QLD 4306

This brick home, built in 2017, has three bedrooms and two bathrooms and sits on 320 square metres of land. All the rooms have built-in wardrobes, and the main bedroom has a walk-in robe. There is plenty of backyard space, perfect for a pool. 

Entry-level houses in Adelaide 

In Adelaide, an entry-level home based on the 25th percentile now costs $689,000. While it’s more expensive than five years ago, finding a house under that budget is still possible.

“I have reservations for first time buyers purchasing in South Australia, as well as Victoria.  Once again, it’s easy to find a good selection of properties but don’t bank on getting quick capital growth,” said Beck-Mewing.

Options for Adelaide

2 George Street, Payneham, SA 5070

Built in 1870, this small bluestone house is an architectural gem and a great starter home. It’s about 4.5 kilometres from the Adelaide CBD and within walking distance of a shopping centre. The house has high ceilings, a patio, a verandah and a pergola. If you’re itching to become a renovator, this home is full of potential.

15 Hampshire Street, Mansfield Park, SA 5012

This red-brick Mansfield Park house has five bedrooms and sits on a 562-square-metre block of land. It includes a carport, a garage and a massive sunroom. The house measures 294 square metres – plenty of space for a starter home.

Entry-level houses in Perth

In Perth, an entry-level home based on the 25th percentile is now $645,000, but free-standing houses are available at a much lower price point. 

“Perth has the kind of growth drivers I look for when making a great property decision.  The prices are very first-time buyer friendly, plus we’re starting to see an increase in job diversity – WA is no longer almost totally reliant on the mining industry,” Beck-Mewing said.

“In addition to this, the government is really putting a lot of money into expanding transport and other infrastructure, and the population has reached a tipping point where there’s great natural growth.”

Opportunities for Perth

2/9 Burwood Road, Balcatta, WA 6021

The price guide for this three-bedroom house is in the mid-$500,000, perfect for a first-time buyer on a tight budget. It has an open-plan kitchen with stainless steel appliances. The bedrooms have built-in wardrobes, and the bathroom has a separate shower and bath. It’s less than 10 kilometres from the CBD.

133a Ravenswood Drive, Westminster, WA 6061

This white-brick three-bedroom, two-bathroom house has an open-plan living and dining area and a separate lounge/media room. Starting from $609,000, the Westminster property is within walking distance of a bus stop and 1.4 kilometres from the Reid Highway.

The news for first time buyers is that there’s still opportunities available, though if you’re keen to purchase a house – as opposed to unit, town house or duplex, there might be a little more travel involved for your morning commute.

This article first appeared in Domain.com.au