Buyers looking for the most economical towns and suburbs where mortgage repayments are manageable should head to Fisherman Bay in regional South Australia.
According to new data from PropTrack, the coastal community 200km north of Adelaide is the “most serviceable” suburb to own a house in, with mortgage repayments taking just 2.7 per cent of the average total income in the area.
In Fisherman Bay, which is a popular holiday spot and known for its fishing, the monthly mortgage repayments on a house are just $270, while the average income is $61,000 a year.
Coming in second on the Top 10 list of “most serviceable” suburbs is Kambalda West, a mining town about 60km south of Kalgoorlie.
In Kambalda West, the monthly house mortgage repayment of $670 is 4.4 per cent of the average total income of the area at 92,000.
The PropTrack data comes after interest rates have lifted 400 basis points over the past 14 months, meaning homeowners have had to tighten their belts considerably.
“That means mortgage serviceability – mortgage repayments relative to income – has worsened,” PropTrack Economist Angus Moore said.
“But there are still some parts of Australia where mortgages 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.
“These are typically in outer suburban areas like the outer west or Central Coast in Sydney, the west in Melbourne, or Ipswich in Brisbane.
“Units in some very prestigious markets (such as Paddington and Vaucluse) end up looking affordable in this list, though this is reflective of incomes.
“Average incomes in these areas are quite high (in excess of $200,000 in some cases); but the people buying units in these areas are probably not earning that income.”
Coming in third spot on the list of suburbs with the most serviceable mortgage repayments for houses is Blackwater, in central Queensland.
In Blackwater, the monthly house mortgage repayments of $860 are 5.2 per cent of the average total income of the area at $98,900.
Buyers looking for units with good serviceability should turn to Mosman Park in Perth.
In Mosman Park, the monthly unit mortgage repayments of $1660 are 5.9 per cent of the average total income of $170,000.
Coming in second spot is South Gladstone, where the monthly unit mortgage repayments of $810 are 6.2 per cent of the average total income of $78,100.
To calculate the results, PropTrack looked at mortgage repayments on a median-prices house or unit in the suburb as a share of average total income for the suburb, with mortgage repayments calculated assuming a 20 per cent deposit, a 30-year loan term and an interest rate of 5.91 per cent.
Income was based on total income from the ATO (which is broader than just wages/salaries) for the 2020/21 financial year, grown forward to today using growth in the Wage Price Index for a single person. The share assumes a two-person household with both household members earning average total income for the suburb.
The third most serviceable suburb for units was also in regional Queensland, in the Central Highlands town of Emerald.
In Emerald, the monthly unit mortgage repayment of $950 is 6.4 per cent of the total average income of $89,700.
