110 booming suburbs where you can buy in for less than $40k upfront

That uplift has been a boon for anyone who already owned a property before prices took off, although it’s made it even more challenging for buyers trying to purchase a home.

But even though the pace of growth has decelerated in these cities, strong demand is likely to support price growth in the months ahead.

Hot suburbs where 5% deposits start at $16,000

The most affordable suburb on the list, Orelia in Perth’s south, has a median unit value of $320,000, meaning first-home buyers opting to purchase using a 5% deposit under the scheme would only need to pay $16,000 upfront to secure a home.

A 5% deposit of about $25,000 to $30,000 could allow buyers to purchase a median-priced unit in popular inner-city suburbs such as Mount Lawley or Inglewood under the scheme, while $24,000 would afford beachside Mosman Park.

In Brisbane’s Ipswich region, a $30,000 to $35,000 deposit would be sufficient for a median-priced house in affordable booming suburbs such as Woodend, Tivoli and North Booval, where prices rose by more than 20% in the past year.

A deposit of about $35,000 would be sufficient to buy a median-priced unit in inner Brisbane suburbs such as Newmarket and Windsor under the First Home Guarantee.

Buyers with $25,000 deposit could look at units in Slacks Creek in the south or Caboolture in the north, but a 5% deposit for a house in those suburbs would be closer to $40,000.

Caboolture real estate agent Matt Stone of First National Real Estate Moreton said the suburb had long been popular with first-home buyers seeking value for money, but the expanded scheme had boosted demand.  

“It’s definitely bringing more buyers to the open homes, “ he said. “Even though prices are going up, we’re still very affordable.”

Meanwhile, a house in Berrimah in Darwin’s east could cost $17,750 upfront – a deposit equivalent to 5% of the suburb’s $355,000 median house price.

Prices in Darwin have grown faster than in any other capital city in the past year, fuelled by an influx of investors. Berrimah’s median house price jumped by 42% to $355,000 in 12 months.

In Elizabeth Grove in Adelaide’s outer north, a first-home buyer could purchase a typically-priced house with just $26,175 upfront using the First Home Guarantee. A 25% jump in prices in the past year took the suburb’s median house price to $523,000 in the past year.

But Adelaide buyers opting for a unit could look at beachside Glenelg, where a 5% deposit of about $35,000 is enough for a median-priced apartment.

Real estate agent and Belle Property Glenelg / Henley Beach principal David Ferrari said the expanded scheme had stimulated the market and encouraged more first-home buyers to transact, even though prices have already surged.

“A lot of first-home buyers in the market are thinking now is the time to buy,” he said. 

“Buyers are realising there’s going to be no respite. With a couple of interest rate drops, it’s just going to keep the juggernaut of the Adelaide market ticking over.”

Demand-side stimulus expected to push prices higher

The expansion of the First Home Guarantee was designed to allow first-home buyers to purchase a home sooner, but the sudden influx of buyers is expected to increase competition.

More buyers in the market is likely to lead to higher prices, given the challenges getting new homes built to meet the growing population.

“With stock on market constrained and new supply challenged, demand-side stimulus is likely to intensify competition,” Ms Creagh said.

Home prices are already at record highs after rising in all major markets last month after the Reserve Bank’s August interest rate cut, which Ms Creagh said had strengthened price momentum.

“With enquiries per listing at a three-year high and search activity on realestate.com.au the strongest since late 2021, it’s clear more buyers are active,” she said.

“The housing market is poised for further gains throughout spring, though the pace will vary across cities as momentum shifts.”

Booming suburbs where a 5% house deposit is less than $40,000

Booming suburbs where a 5% unit deposit is less than $40,000