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Commonwealth Bank reveals buying options for first time buyers across Australia

26 April 2010:  The Commonwealth Bank has revealed the locations across Australia which are offering first home buyers sound investment opportunities. 

Research from the Commonwealth Bank and RP Data shows there were almost 41,500 house and unit sales recorded over the second half of 2009 that were within ten per cent of the average first home buyer purchase amount.  That equates to almost one in five home sales that were right in the middle of the average first home buyer purchase amount.

Commonwealth Bank’s ‘Affordable locations for first home buyers’ report prepared by RP Data, reveals the locations where opportunities exist for the average first time buyer to purchase a home based on demonstrated purchasing power from the past six months.

Other notable key findings include:

  • In capital cities, 62 per cent of transactions were for houses whilst regional areas house sales accounted for a greater 74 per cent of all purchases.
  • Approximately 6 per cent of transactions for houses have been within 10 kilometres of the relevant CBD highlighting that opportunities for first home buyers to own a detached home close to the city are limited.
  • 38 per cent of transactions for units were within 10 kilometres of the capital city CBD which indicates that for a first home buyer, inner city units are a much more likely purchase option than inner city houses.
  • Approximately 19 per cent of all sales nationally were within 10 per cent of the relevant first home buyer purchase price in capital cities with the figure at 21 per cent within the major regional areas and 16 per cent in smaller regional areas.
  • The results show that the average first home buyer doesn’t have to live a great distance from the city, particularly if they don’t mind living in an apartment.

According to James Sheffield, General Manager Mortgage Wealth, opportunities exist for first time buyers providing they do their research to ensure they are making an informed decision.

“Changing market forces and an aggressive property market highlight why it’s never been more important to get back to basics – do your numbers and research before you buy and make sure you take a long term view when purchasing a property.”

Across Australia there have been more than 27,000 houses and over 14,000 units sold during the last six months of 2009 within plus or minus 10 per cent of the Commonwealth Bank’s average first home buyer purchase price. That’s almost one fifth of all the sales settled during the six month period.

Capital city markets

Across Australia’s capital cities, 62 per cent of sales were houses and 38 per cent were units. Sydney recorded the greatest volume of transactions with 8,712 followed by Melbourne (6,694), Brisbane (4,451) and Perth (3,648).

Canberra recorded the greatest average first home buyer price at approximately $396,000 followed by Sydney ($388,000) and Darwin ($374,000), not surprising given these are three of the nation’s most expensive capital cities based on median selling prices. The most affordable capital city market was Hobart with a median price around $295,000 followed by Adelaide ($296,000) and Brisbane ($337,000).

Top locations for first time buyers

Location

State

Houses sold

Units sold

Total sold

Average funded amount

Average price

-10%

+10%

Gold Coast-Tweed

QLD/NSW

 

215

1123

1338

$266,880

$313,977

$282,579

$345,375

Newcastle

NSW

866

232

1098

$232,585

$273,629

$246,266

$300,992

Wollongong

NSW

323

235

558

$261,334

$307,451

$276,706

$338,197

Geelong

VIC

338

102

440

$233,577

$274,796

$247,316

$302,275

Townsville

QLD

320

88

408

$255,657

$300,773

$270,696

$330,851

Sunshine Coast

QLD

71

307

378

$262,842

$309,225

$278,303

$340,148

Toowoomba

QLD

297

63

360

$213,190

$250,811

$225,730

$275,893

Mackay

QLD

230

34

264

$295,083

$347,156

$312,441

$381,872

Launceston

TAS

211

29

240

$213,945

$251,701

$226,530

$276,871

Cairns

QLD

116

102

218

$221,292

$260,344

$234,310

$286,378

 

Major regional areas

In areas outside the capital cities, the greatest number of transactions were recorded in New South Wales (1,410), Victoria (1,273) and Queensland (1,182). The fewest transactions were recorded in Tasmania (99), Northern Territory (143) and Western Australia (337). 

The Northern Territory had the greatest average first home buyer price at $332,539 followed by Queensland ($301,844) and Western Australia ($277,540). While the the most affordable regional areas were found in Tasmania ($224,551), Victoria ($227,472) and New South Wales ($240,716).

Mr Sheffield added, “For a first home buyer the results show there are opportunities to purchase property at average prices within both capital cities and more regional areas of the country, but a well researched buying strategy will be key.”

According to RP Data’s Research Director Tim Lawless, first home buyers are far from being priced out of the market.

“Opportunities for first home buyers to get into the market remain plentiful however, they may have to re-evaluate where they are able to afford to purchase.  There is generally a limited supply of affordable housing product close to the CBD, as a result units may be a better option for first home buyers otherwise they will need to target strategic locations further away from the city to purchase houses.” Mr Lawless said.

 Copy of the report

A full copy of the report is available to the media from Commonwealth Bank’s PR team or via download at www.commbank.com.au/affordablefirsts

 Notes to editors: report methodology

The average first home buyer purchase price is based on an analysis of home loans funded to first home buyers (including lenders mortgage insurance) by the Commonwealth Bank.  A loan to valuation ratio (LVR) of 85 per cent has been assumed (based on the funding amount and applying the LVR assumption – the average first home buyer purchase amount for each region has been determined). 

For capital cities, Commonwealth Bank first home buyer loan amounts for the December quarter have been used to determine the average purchase price (excluding Hobart and Darwin). For all other regions analysed the report has extended the funding time frame to the six months ending December 2009 to ensure a statistically representative sample size was available.

For a more detailed understanding of the methodology, turn to page 54 in the report.

For further information:

Sarah Gibbons

Commonwealth Bank

P (02) 9118 1706

M 0403 681 515

 

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