(Realestate) – Buying a home can test your emotions, and it’s particularly tough when your budget doesn’t match your dream location. So, how do you compromise?
Buyers prepared to move their search away from their ideal neighbourhood to its sister suburb, could save thousands according to new realestate.com.au data.
What is a sister suburb?
Suburbs located a similar distance from the CBD to a popular area with great amenities, but with much lower median house prices are called sister suburbs.
Sometimes these areas are just next to a sought-after suburb, but often the more extreme price differences can be found in sister suburbs on the other side of town with a similar commute distance and common amenities such as parks or cafes.
These areas offer buyers homes in a comparatively more affordable location.
Often the homes or the blocks of land are larger, and while buyers may need to compromise on some lifestyle factors, such as being a bit further away from the beach, these suburbs can be a great alternative.
New realestate.com.au data shows if buyers purchase a home in a sister suburb to some of the nation’s priciest and most in-demand areas they could save between $182,000 and $2,875,000 based on median prices.
The data taken from the 12 months to July 31 2019, highlights one premier neighbourhood per capital city and its much cheaper sister suburb.
This Queenslander in East Brisbane is currently on the market for $789,000. Picture: realestate.com.au
For example, the riverside suburb of Teneriffe in Brisbane, which has a mix of old homes and apartments in historic warehouse-style buildings, has a median house price of $1,862,500 and is located less than 3kms from the CBD.
Yet over in East Brisbane, where the median house price is $835,000, buyers can find many original Queenslanders in an area with similarly great cafes and parks, which is also around 3kms from the CBD.ADVERTISEMENT
Sister suburbs often experience price growth
Historically sister suburbs have become great investments for buyers as these affordable areas change over time and become much more attractive, according to realestate.com.au chief economist Nerida Conisbee.
“What seems to have happened is in Sydney for example, the east has gotten very expensive, people have gotten priced out and they’ve moved west. So what’s happened longer term in the west is urban regeneration with young people moving in, you’ve had improvements to cafes and restaurants and all the rest. From an investment perspective, it has made sense in the past.”
“What we have seen in the west is that if you can buy a very similar quality house for a lot less money, then that’s a very attractive option,” she says.
Given the affordability issues many buyers, particularly those in Melbourne and Sydney face, sister suburbs help individuals locate other areas that better suit budgets.
“It’s an affordability issue. Buying for $5 million in Bellevue Hill is out of reach for pretty much everyone. But once you get to a suburb in the west that’s priced between $1-$2million, then the pool of buyers that can afford that goes up and that helps with price growth (in those areas) too,” she says.Why spring is the selling season!
With the spring selling season just around the corner, those looking to sell a property in an area identified as a sister suburb now is a great time to get a great price, Conisbee says.
“We’ve got a lot buyers and not much stock and that will eventually lead to price growth. There’s definitely a lot more confidence in the market, the fact we’ve had no changes to negative gearing has been positive for investors, we’ve also had two interest rate cuts and there are potentially more interest rate cuts, and finance is very cheap – so that’s very positive. There’s a lot of good news at the moment around the market and that’s flowing through to increased search (activity) on” she says.