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A new report from PropTrack identified the top suburbs where homebuyers will still be able to manage and service mortgage repayments despite the rate hikes.
PropTrack economist Angus Moore said while the cumulative 400bps increase in the cash rate to June 2023 has worsened mortgage serviceability, there are still some parts where home loans are still quite affordable relative to suburb average incomes.
“These are mostly in regional areas, where prices are lower. But even in the capital cities, there are some pockets where mortgage costs remain on the more affordable side relative to incomes,” he said.
For houses, Fisherman Bay in regional South Australia is the most serviceable.
Houses in this suburb has a median sale price of $60,000 by the end of May 2023. On the other hand, the average total income is at $61,000.
Current mortgage repayments in Fisherman Bay are at $270 monthly, which is 2.7% of the average income.
For units, mortgage repayments are most serviceable in Mosman Park in Greater Perth.
The median sale price of a unit in the suburb is at $350,000 — this is against the average total income of $170,200. This means that the $1,660 monthly repayment is only 5.9% of the income.
“Average incomes in these areas are quite high, but the people buying units in these areas are probably not earning that income.”
The tables below show the suburbs across Australia where mortgage repayments are the most manageable despite rate hikes.
Suburbs with most serviceable mortgage repayments for houses
|
Suburb |
City/region |
Median sale price for houses - 12 months to end May ($) |
Average total income ($) |
Current mortgage repayments ($) |
Mortgage repayments as a share of income (%) |
|
Fisherman Bay |
Rest of SA |
60,000 |
61,000 |
270 |
2.7 |
|
Kambalda West |
Rest of WA |
140,000 |
92,000 |
670 |
4.4 |
|
Blackwater |
Rest of Qld |
180,000 |
98,900 |
860 |
5.2 |
|
Charleville |
Rest of Qld |
150,000 |
62,300 |
710 |
6.9 |
|
Roxby Downs |
Rest of SA |
280,000 |
112,400 |
1,320 |
7.0 |
|
Moura |
Rest of Qld |
185,000 |
74,100 |
880 |
7.1 |
|
Cloncurry |
Rest of Qld |
220,000 |
85,100 |
1,050 |
7.4 |
|
Cobar |
Rest of NSW |
200,000 |
75,600 |
950 |
7.5 |
|
Port Pirie West |
Rest of SA |
160,000 |
59,700 |
760 |
7.6 |
|
Broken Hill |
Rest of NSW |
180,000 |
66,200 |
860 |
7.7 |
Suburbs with most serviceable mortgage repayments for units
|
Suburb |
City/region |
Median sale price for units - 12 months to end May ($) |
Average total income ($) |
Current mortgage repayments ($) |
Mortgage repayments as a share of income (%) |
|
Mosman Park (WA) |
Greater Perth |
350,000 |
170,200 |
1,660 |
5.9% |
|
South Gladstone |
Rest of Qld |
170,000 |
78,100 |
810 |
6.2 |
|
Emerald (Qld) |
Rest of Qld |
200,000 |
89,700 |
950 |
6.4 |
|
West End (Townsville - Qld) |
Rest of Qld |
215,000 |
85,700 |
1,020 |
7.2 |
|
Wembley |
Greater Perth |
290,000 |
114,000 |
1,380 |
7.3 |
|
South Hedland |
Rest of WA |
260,000 |
98,700 |
1,240 |
7.5 |
|
Cottesloe |
Greater Perth |
910,000 |
331,100 |
4,320 |
7.8 |
|
Manunda |
Rest of Qld |
195,000 |
69,200 |
920 |
8.0 |
|
Hermit Park |
Rest of Qld |
200,000 |
68,700 |
950 |
8.3 |
|
Bungalow |
Rest of Qld |
205,000 |
69,200 |
970 |
8.4 |
Take note that the repayments stated above are based on a home loan with 30-year term, a 5.91% interest rate (average new mortgage rates according to the central bank). The calculation also assumes that the buyer has a 20% deposit.
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Photo by Arnav Ray on Canva.
Collections: Mortgage News Interest Rates
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