Top real estate bargains in Australia

Ever wondered where the best real estate bargains can be found in the country? You probably guessed it; they aren’t in our big cities! In fact, Adelaide, Brisbane, Melbourne and Sydney all ranked in the top 10 most unaffordable metropolitan cities of the world, according to Demograhia’s latest International Housing Affordability Survey.

But if you’re willing to look beyond the capital cities, the good news is that you’ll likely find some of the country’s best bargains in bricks and mortar. And if you’ve considered moving for work, family, or just for a fresh start, the savings to be found from a tree change may be the catalyst you were looking for.

Mortgage stress?

The median house price in Australia equates to almost 10 times the national median income, according to the survey.

For example, Canberra’s median house price at $558,100 is 5.6 times as much as its median income of $100,400, while Sydney’s average house costs $634,300 and its residents earn $66,200.

For instance take Max from Canberra, and Sarah from Sydney, and assume they each borrow 80 percent of the value of a median home in their city over 25 years, and at 7 percent interest per annum.

At this rate, Max will pay $3156 per month – or 38 percent of his income – and a total of $946,669 over the life of his loan. Meanwhile, Sarah will pay $3586 per month – or a whopping 65 percent of her income – adding up to almost $1.08 million in principal and interest over the 25 years.

This means that Sarah is paying almost $130,000 more than Max, not to mention spending a bigger portion of her monthly income on repayments. By definition both Sarah and Max are entering a state of mortgage stress, which is when you contribute more than 30 percent of your income to mortgage repayments.

The bargains and how to find them

The most affordable city in Australia is Mildura, Victoria, with a median house price of $188,300 and income of $45,000.

Those considering a move to more regional areas may be eligible for several state and national grants.

In regional Victoria, you may receive $13,000 for the construction of a new home, on top of $6500 provided by the Regional Bonus Scheme. In New South Wales, there is a $7000 Regional Relocation Grant operating from July 2011 to 2015 to cover the costs of moving from metropolitan to regional areas.

Picture a new life and save thousands on your home loan. If you can’t find the Australian dream in your city, you may not be looking around Australia enough.

Compare home loans in Australia