A buyer's agent has identified five Australian cities as prime locations for purchasing a home for under $700,000, notably excluding any capital cities. This comes as millions of Australians face increased mortgage burdens following the Reserve Bank's latest interest rate hike, which pushed the cash rate to 4.35 per cent.
For an owner-occupier with a $600,000 mortgage and 25 years remaining, the 0.25-percentage-point increase adds $91 to monthly repayments, totalling $272 per month across three hikes since February. Additionally, the Federal Budget announced a reduction in negative gearing benefits, now applicable only to new builds.
Buyer's agent Jordan Veleski, 37, told the Daily Mail that the rate hike would not significantly impact the housing market. 'If you're buying at entry level, under $800,000, I don't think it's going to affect that much. If you've saved up and have buffers, it's fine,' he said. 'Towards the top end, over $2 million, it may affect people, but for first-time buyers at the lower end, it won't affect them much. If they've decided to buy, they'll buy.'
However, the change to negative gearing will require careful consideration from prospective buyers. 'The government is effectively steering investor money toward new supply,' Veleski warned, noting that first home buyers and investors will now compete in new estates on the fringes of capital cities where house and land packages sell for around $700,000. 'More buyers chasing the same product usually means upward pressure on prices, contradicting what the government says it is trying to do.' He added that the reform may only impact prices short-term, as 'long-term fundamentals haven't changed'.
For those on a tight budget, Veleski advised keeping an 'open mind' about areas outside major capitals. 'Perth, Brisbane, Adelaide – they've all doubled in the last five years. Even in western Sydney, houses are going for over $1.5 million. Trying to buy that as your first home in your twenties isn't realistic for most people. Don't get caught up in areas that have already boomed. Look for emerging markets.'
Top 5 Emerging Areas for Under $700,000
Geelong, Victoria
Just an hour southwest of Melbourne, Geelong offers suburbs like Whittington, Newcomb, Thomson, and Corio. With a population of 300,000, Veleski highlights that population size creates stability. 'Where there's 50,000 plus in population, there's diversification in industry. It gives you peace of mind and confidence that long-term growth will occur.' The presence of a domestic airport also attracts investors, first home buyers, and retirees.
Launceston, Tasmania
Properties in South Launceston and Prospect fit the criteria. 'It's a very hot market, a lot of buyer's agents are getting in. The rental vacancy is below 1 per cent, so it's tight for renters. But for buyers, it has a strong population of almost 100,000 with a lot of infrastructure. There's a $2.1 billion AI factory in St Leonards, creating 1,000 jobs, and they want to make Launceston the AI hub of Australia. Combined with a new University of Tasmania campus, there's a lot going for the area with plenty of homes below $700,000.'
Cairns, Queensland
Suburbs like Edmonton, Mount Sheridan, and Bentley Park have possible properties under $700,000. 'You've got a 180,000 population, expected to double by 2050. They have the Great Barrier Reef, an international airport to Tokyo and Singapore, and a $55 million terminal upgrade. Follow the money – if government is pouring money into these areas, it's a good sign of growth.'
City of Hume, Victoria
Including Broadmeadows, Meadow Heights, and Dallas, only 20km from Melbourne's CBD, with a direct train line. 'They've had 10 to 15 per cent capital growth in the last 12 months. The Melbourne market is turning in these affordable areas.' With a population of 244,000 and an auction clearance rate over 80 per cent, it's one of the strongest in the country.
Tamworth, New South Wales
Though difficult to find properties under $700,000 in NSW, Tamworth offers opportunities. 'About $24 billion is expected to be invested into a renewable energy zone in Tamworth, making it the capital of renewable energy in NSW. It has an intermodal freight terminal between Port Botany and Port Newcastle. I've just bought for a client there – $620,000 for a solid property with a big block of land.'
An Exception: Darwin, Northern Territory
While aiming for non-capital cities, Veleski made an exception for Darwin's Palmerston suburbs like Gunn and Bakewell. 'I just bought a property for $672,000 for a client, and he's now getting $780 per week in rent, which you can't get anywhere else in any capital city.'
