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Most affordable places to live

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Most affordable places to live
Sydney, you’re pretty, but let’s take your prices down a notch, eh? Picture: Destination NSW

IT’S no surprise to most Australians that the cost of living varies greatly from one city, state or territory to another.

But exactly which places are the most affordable when it comes to everyday expenses including rent, fuel, groceries, transport, utilities and education? And which ones will burn a hole in your pocket faster than the others?

The latest report from Numbeo, a cost of living website which collates prices of goods and services from hundreds of cities around the world, shows that almost everything is cheaper in Hobart compared to other major cities nationwide.

It also confirmed what Sydneysiders already knew: it’s the most expensive place to live in the country. Melbourne, Darwin and Perth trail closely behind.

Labor leader Bill Shorten said the government’s priorities – including the Australian mining sector – were out of whack. “I wish they’d just start talking about everyday Aussies in terms of cost of living,” he said on Wednesday.

While Sydney ranked 32 in the list of the world’s most expensive cities, it was the 16th most expensive city in terms of rent, according to Numbeo.

Sydney has this year risen to number 32 in this year’s Cost of Living Index, up from 41 last year, according to Numbeo.

Melbourne rose to 64, up from 77, while Adelaide, Cairns, Hobart and Canberra also moved up the list to 58, 69, 82 and 103 respectively.

Only Perth (56), Darwin (68) and Brisbane (93) have become more affordable, according to the site, which ranks the results based on information provided by thousands of residents.

RENT, CHILDCARE AND RESTAURANTS

A one-bedroom, city centre apartment costs an average of $2681.48 per month in Sydney.

That’s compared with Melbourne ($1767.60), Canberra ($1733.26), Brisbane ($1726.13), Adelaide ($1705.67), Gold Coast ($1568.92), Darwin ($1524.35), Perth ($1523.41) and Hobart ($1208.33). Those with kids can more than double their outgoing expenses if they live in Sydney with the cost of sending one child to childcare full-time for a month about $2038.27. Child care is even more expensive on the Gold Coast ($2250) but significantly cheaper in Adelaide ($1600), Melbourne ($1478), Brisbane ($1243), Perth ($1214), Darwin ($1,200), Canberra ($1168) and Hobart ($683.33), according to the site.

The data also showed that costs including groceries, rent and restaurant prices were most expensive in Sydney and Darwin, while cities like Hobart, Cairns and the Gold Coast had some of the cheapest.

COFFEE, PETROL, UTILITIES

But not all is lost for Sydney – while residents might be down thousands of dollars in rent, they’re up an entire buck or two when it comes to coffee. Sydney is home to country’s cheapest hot drinks with a regular cappuccino costing about $3.90, compared with the highest median price for the same item in Darwin, at $4.75.

The Northern Territory capital might be small in size – with a total population of about 250,000 people – but it’s also home to some of the highest prices for fuel and utilities nationwide.

The national average for unleaded petrol is 138.9c per litre. But in the NT, prices soar above the rest, with a median price of 183.9c per litre in the troubled town of Tennant Creek, 176.9c per litre in Alice Springs and 150.2c per litre in the capital of Darwin, according to 2018 NT government figures. The median price for monthly utilities – including power and water – in Darwin is $332.80. That’s compared with the cheapest average of $181.20 per month in Perth. Even a meal at McDonalds will cost about an extra $2 than in other states.

Most affordable places to live
Darwin is home to the country’s most expensive coffee and fuel. Picture: Justin Kennedy

MILK, BREAD AND BEER

The Gold Coast is also where you can find the country’s cheapest bread, at $2.12 a loaf. Brisbane follows closely behind ($2.14), with Sydney selling the staple food at the highest average rate of $2.80. And if you’re up for a good time at the lowest price possible, the Gold Coast is also where it’s at, with the nation’s cheapest in-restaurant domestic beer ($5.75). That’s compared to the most expensive average of $8 in both Melbourne and Darwin.

For the more straight-laced, Hobart could be a better option, boasting the cheapest milk at $1.11 for one litre. In Perth, the same product costs consumers about $1.59 – the highest average in Australia.

But the most isolated city in the world makes up in electricity prices what it lacks in cartons of milk, offering the cheapest average price for utilities in the nation. The average monthly cost of a power and water bill in a 85m2 apartment in Perth is $181.2. That’s compared to

Darwin ($332.80), Adelaide ($297.95), Melbourne (214.82), Sydney ($176.69), Brisbane ($212.60), Hobart ($236.99), Canberra ($184.73) and the Gold Coast ($184.41).

Most affordable places to live
Darwin residents settle in for a sunset at Cullen Bay: a priceless Territory pastime.

PROPERTY

Hobart is the most southern of Australia’s capital cities, its harbour is the second-deepest natural port in the world, making it a popular destination for boaties. It’s also one of the cheapest capital cities in the country although wages are also below the national average. Hobart is also known for its arts and culture, its majestic scenery such as Mt Wellington, picturesque waterways including the Derwent River and rich cafe and restaurant scene. With a median house price of $402,000, strong capital growth and good long- term projections, the area presents a solid market.

Even suburbs that are located within less than 2km from the CBD, including North Hobart and South Hobart, with median houses prices of $582,000 and $631,000, respectively, are relatively affordable compared to cities like Sydney, where the median house price is upwards of $1 million and Melbourne where it has pushed past $840,000.

In Victoria, households are shelling out almost $75,000 a year on general living expenses, a major study of spending habits reveals.

The 2017 Household Expenditure Survey found that in 2015-16 essentials cost $843 of the average $1430 Victorians spent on goods and services each week.

Housing costs – on rent, mortgages, rates and home-and-contents insurance – were the biggest drain ($257), the Herald Sun reported.

Food, including meals out and non-alcoholic drinks, cost $244, and transport – driving, taxi fares, and train, tram and bus fares – cost $218.

Most affordable places to live
Hobart city skyline from Knocklofty.

A buoyant Canberra housing market is leading to healthy long-term investment options for savvy homebuyers, according to RiskWise Property Research.

While the Sydney market goes flat, many Sydney-based investors and buyers’ agents are looking to Canberra – which has a median house price of about $750,000 – as a solid long-term property market that delivers both capital growth and solid rental return.

Less than 300km southwest of Sydney, Canberra has enjoyed solid capital growth of 23 per cent over the past five years and 10 per cent in the past 12 months.

RiskWise Property Research CEO Doron Peleg said it was a trend set to continue.

“This will be driven by ongoing population growth due to the strength of the local labour market and its growing status as a city of choice for a growing number of Australians,” Mr Peleg said.

“Canberra is a rapidly expanding city with a stable property market that offers relatively affordable housing (in house-to-income terms). In addition, ongoing infrastructure projects, such as the Canberra Light Rail Network, will bring significant benefits to the area.”

Most affordable places to live
Canberra ACT from the sky.

An hour’s drive from the state capital Brisbane, the Gold Coast is the sixth largest city in Australia and is forecast to have 1.2 million residents living there by 2050, according to demographer Bernard Salt. The region has a stable property market that offers relatively affordable beachside suburbs, such as Miami which has a median house price of $749,000, according to industry experts.

CoreLogic’s regional market update to December 2017 places the median house price at $634,423, while the median unit price is $411,229.

Most affordable places to live
An aerial view of Surfers Paradise on Queensland’s Gold Coast in Australia. Picture: Istock

RiskWise CEO Doron Peleg said that despite gaining infamy for violent incidences and drunken behaviour in Surfers Paradise, the Gold Coast was one of the most popular destinations for both owner-occupiers and investors in southeast Queensland.

“It has beautiful beachside and waterside suburbs, an unrivalled lifestyle, good infrastructure, a large number of well-off residents and locals who describe the Gold Coast as ‘heaven for children’,” Mr Peleg said.

“The Gold Coast has a stable property market that offers both affordability and excellent access to superb beach and coastal areas, and that is very appealing to buyers.”

But there are fears about what will become of the glitter strip’s property market once the Commonwealth Games, set to start this month, are done and dusted.

Collier’s Gold Coast International director Darrell Irwin said property market indicators showed the region had a “healthy sector” that would survive the exodus when the curtain closes on the Games.

“The Games has brought forward infrastructure investment in projects such as the light rail construction, and upgrades to the aquatic centre and Carrara Stadium, which have helped fuel demand across the board in the residential, commercial office, retail, and industrial sectors,” he said.

“We’ve seen commercial office vacancy rates continue to fall over the last three years to the current level of 10.3 per cent as reported in the most recent Property Council of Australia figures.

“With no new office buildings under construction, we expect to see that vacancy rate fall further.

“Similarly in the industrial market, there’s been strong demand, a falling vacancy rate and limited land supply.”

Source: www.sunshinecoastdaily.com.au

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Opinion

Negative gearing changes will affect us all, mostly for the better

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Negative gearing changes will affect us all, mostly for the better

Don’t have a negatively geared investment property? You’re in good company.

Despite all the talk about negatively geared nurses and property baron police officers, 90 per cent of taxpayers do not use it.

But federal Labor’s policy will still affect you through changes in the housing market and the budget. Here’s what you should know.

Labor’s negative gearing policy will prevent investors from writing off the losses from their property investments against the tax they pay on their wages. This will affect investors buying properties where the rent isn’t enough to cover the cost of operating the property, including any interest payments on the investment loan.

Doesn’t sound like a good investment? Exactly right: negatively gearing a property only makes sense as an investment strategy if you expect that the house will rise significantly in value so you’ll make a decent capital gain when you sell.

The negatively geared investor gets a good deal on tax – they write off their losses in full as they occur but they are only taxed on 50 per cent of their gains when they sell.

Labor’s policy makes the tax deal a little less sweet – losses can only be written off against other investment income, including the proceeds from the property when it is sold. And investors will pay tax on 75 per cent of their gains, at their marginal tax rate.

Future property speculators are unlikely to be popping the champagne corks for Labor’s plan. But other Australians should know that there are a lot of potential upsides from winding back these concessions.

Limiting negative gearing and reducing the capital gains tax discount will substantially boost the budget bottom line. The independent Parliamentary Budget Office estimates Labor’s policy will raise about $32.1 billion over a decade.

Ultimately, the winners from the change are the 89 per cent of nurses, 87 per cent of teachers and all the other hard-working taxpayers who don’t negatively gear. Winding back tax concessions that do not have a strong economic justification means the government can reduce other taxes, provide more services or improve the budget bottom line.

Labor’s plan will reduce house prices, a little. By reducing investor tax breaks, it will reduce investor demand for existing houses.

Assuming the value of the $6.6 trillion property market falls by the entire value of the future stream of tax benefits, there would be price falls in the range of 1 per cent to 2 per cent. Any reduction in competition from investors is a win for first home buyers.

Existing home-owners may be less pleased, especially in light of recent price falls in Sydney and Melbourne. But if they bought their house more than a couple of years ago, chances are they are still comfortably ahead.

And renters need not fear Labor’s policy. Fewer investors does mean fewer rental properties, but those properties don’t disappear – home buyers move in, and so there are also fewer renters.

Negative gearing would affect rents only if it reduced new housing supply. Any effects will be small: around 90 per cent of investment lending is for existing housing, and Labor’s policy leaves in place negative gearing tax write-offs for new homes.

All Australians will benefit from greater stability in the housing market from the proposed change. The existing tax breaks magnify volatility. Negative gearing is most attractive as a tax minimisation strategy when asset prices are rising strongly. So in boom times it feeds investor demand for housing. The opposite is true when prices are stable or falling.

The Reserve Bank, the Productivity Commission and the Murray financial system inquiry have all raised concerns about the effects of the current tax arrangements on financial stability.

Negative gearing would affect rents only if it reduced new housing supply.

 

And for those worried about equity? Negative gearing and capital gains are both skewed towards the better off. Almost 70 per cent of capital gains accrue to those with taxable incomes of more than $130,000, putting them in the top 10 per cent of income earners.

For negative gearing, 38 per cent of the tax benefits flow to this group. But people who negatively gear have lower taxable incomes because they are negatively gearing. If we look at people’s taxable incomes before rental deductions, the top 10 per cent of income earners receive almost 50 per cent of the tax benefit from negative gearing.

So you shouldn’t be surprised to learn that the share of anaesthetists negatively gearing is almost triple that for nurses, and the average tax benefits they receive are around 11 times higher.

Treasurer Josh Frydenberg says aspirational voters should fear Labor’s proposed changes to negative gearing and the capital gains tax.

But for those of us who aspire to a better budget bottom line, a more stable housing market and better opportunities for first home buyers, the policies have plenty to find favour.

 

Source: brisbaneinvestor.com.au

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Opinion

Revealed: The top 10 suburbs to buy a bargain home and reap long-term capital growth returns – but experts warn there’s a catch

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Revealed The top 10 suburbs to buy a bargain home and reap long-term capital growth returns - but experts warn there's a catch

The top 10 suburbs for buying a bargain home have been revealed.

The top two on the list were Norlane and Lovely Banks, two northern suburbs in Geelong, Victoria, while the remaining eight all come from Queensland.

Hollywell in the Gold Coast was named as the best Queensland suburb for an affordable home with long-term capital gain, according to property researcher RiskWise.

The Gold Coast suburb, located 70km south of Brisbane’s CBD, is close to shopping centres, good schools and the beach.

Experts have warned buyers not to confuse a ‘bargain’ property with a ‘cheap’ one.

top 10 suburbs to buy a bargain home and reap long-term capital growth returns

 

The coastal suburb also has many older properties which will have plenty of potential after renovation, according to realestate.com.au.

It has a median house price of $786,614, according to property data researcher CoreLogic.

Mount Ommaney, Sinnamon Park and Gordon Park in Brisbane also make the list, followed by Gaven on the Gold Coast and Doonan in the Sunshine Coast.

Mount Ommaney, an outer suburb located 14 kilometres south-west of Brisbane’s CBD, has a median house price of $852,729.

Sinnamon Park, also located south-west of the Brisbane CBD, has a slightly lower median house price of $747,272.

RiskWise’s list ends with Gordon Park, Stafford Heights and Twin Waters in Queensland.

All the suburbs listed had a median house price of $300,000 to $870,000, with Norlane having the lowest price at $370,931 and Doonan with the highest at $871,189.

RiskWise chief executive Doron Peleg warns the public that a ‘bargain’ house does not necessarily mean buying a ‘cheap’ one.

RiskWise listed down suburbs where capital growth was expected to increase steadily over the years.

The top 10 suburbs to buy a bargain home and reap long-term capital growth returns - but experts warn there's a catch

 

‘It’s more about knowing where to buy for long-term capital gain,’ Mr Peleg said.

‘Sure, there are a lot of well-priced houses out there, but if they are not expected to grow in value down the track, then they really aren’t the best buy.

‘These (Queensland) suburbs, which all enjoyed capital growth of 13 per cent of the past 12 months, are expected to continue to do well as they have a number of things going for them.

‘For starters, they are relatively affordable and all within 100km of Brisbane which means, provided there is a good public transport and road infrastructure, commuting to work is not too much of an issue’.

The top 10 suburbs to buy a bargain home and reap long-term capital growth returns

 

Source: brisbaneinvestor.com.au

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Opinion

Property Experts Reveal Surprising Areas Investors Are Snapping Up

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Property Experts Reveal Surprising Areas Investors Are Snapping Up

We all know Sydney’s property market has taken hit after hit recently — but there are other lesser-known areas that are experiencing a sudden property boom.

That’s according to Australian real estate experts, who claim that while investors may have deserted Sydney and Melbourne, their attention has turned to other regions across the country.

According to Daniel Walsh of investment buyer’s agency Your Property Your Wealth, investment activity has now firmly shifted to Queensland.

“Net migration has now overtaken Melbourne due to the affordability that Brisbane has to offer,” he explained.

“We’re also seeing rising demand particularly in the housing sector in southeast Queensland where yields are high and jobs are increasing due to the amount of government expenditure around infrastructure which is attracting families to the Sunshine State.

“With Brisbane’s population growth at 1.6 per cent and surrounding areas like Moreton Bay at 2.2 per cent, the Sunshine Coast at 2.7 per cent and Ipswich at 3.7 per cent, we are forecasting that Brisbane will be the standout performer over the next three to five years.”

Realestate.com.au chief economist Nerida Conisbee agreed, saying Sydney investors especially had started to turn their attention north.

“Interest is strong in the Gold Coast across the board although there’s more action on the south side in places like Tugun and Burleigh Heads,” she said, adding there was also a notable trend towards Tasmania, Adelaide and pockets of NSW.

“In Tasmania, most activity is definitely taking place in Hobart, but it has shifted — a lot of the action was in the inner city, but it’s now happening in the middle and outer ring suburbs, as well as in Launceston.

“Tweed Heads and Byron Bay (in NSW) have also had strong price growth at the moment,” she said, adding that in Sydney, trendy inner-city suburbs like Paddington, the premium end of town and areas like Winston Hills in the city’s west were defying the downward trend.

Ms Conisbee said long-neglected Adelaide was also finally booming after recently hitting the highest median house price ever recorded, largely driven by jobs and economic growth off the back of defence contracts, the announcement of the new Australian Space Agency and other investment in the area.

“Inner Adelaide, beachside and the Adelaide Hills tend to have the most activity but there’s also quite a lot of rental demand in low-cost suburbs so we’re expecting to see a bit more investment there in those really cheap suburbs over the next 12 months,” she said.

“There you can get houses for $250,000 so for an investor, it’s a relatively low cost in terms of outlay and the area is seeing really strong rental demand which means you’re more than likely to get tenants, so for investors it’s a really attractive area.”

Mr Walsh said Sydney still remained a solid investment option in the long term — but stressed it was just not the right time to buy in the city due to its market cycle as well as lending constraints.

“While property prices in Sydney have softened by about 9 per cent this year, they are still high, which means it’s not an affordable option for many investors,” he said, noting the city’s high buy-in prices coupled with relatively low rents made the yields quite unattractive.

“At this point in time, the high costs of entry as well as holding costs make it a location that should be avoided — but not forever,” he said.

“The thing is, Sydney is still Sydney, which means that it will always be in demand.

“Its population is forecast to grow by some three million people in the decades ahead, plus it remains our nation’s economic engine room.”

He said the entire NSW economy remained “robust” with unemployment falling to 4.4 per cent last year, with Sydney’s major infrastructure program also proving there was “much to be positive about” in Sydney.

“Sydney homeowners and investors who bought a number of years ago are still well ahead because they chose the optimal time to buy and they remain focused on the future,” he said, adding the optimal time to re-enter the market probably wouldn’t be for at least another year or two.

Source: brisbaneinvestor.com.au

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