Young home buyers could be better off investing in smaller Australian capitals, like…Adelaide?
Sometimes you’ve got everything in place: a pre-approved home loan, an agent, and a dream. But given Australia’s ridiculously competitive property prices, it’s easy to feel like young first home buyers have limited opportunities.
New Corelogic data suggests sales are slowing down overall nationwide, despite sky-high prices and red-hot auction lots. However, this may not be the case in Australia’s smaller capitals. So unless you’re in a strong position to accrue lots of debt by investing in Sydney, Melbourne, or Canberra property, young buyers with smaller loans/debt limits may be better served farther afield.
Brisbane and Adelaide have shown small but compelling upward ticks in sales and supply. So even if you’re just looking to grow your equity, these rising capitals could represent a more realistic investment opportunity for younger buyers.
Let’s compare and see how far your home loan can take you in Australia’s smaller cities.
Property in smaller Australian capitals could give you bigger bang for your buck
There are a few ways to gain a unique edge in the Australian property market, like buying off-market, but these tactics can have hidden expenses on top of your home loan. So how can price conscious buyers maximise their opportunities?
According to the current ABS residential property price index, the prices in Sydney and Melbourne have skyrocketed due to intense demand. While the smaller capitals have also seen spikes, they had less dramatic final results.
From here, we can pick out the relatively cheaper states as potential investment avenues.
Area | QLD | TAS | SA | WA | NT |
Mean dwelling price | $749,100 | $649,200 | $614,300 | $614,300 | $489,000 |
These low prices have driven a bit of a property boom in the smaller state capitals, especially Adelaide and Brisbane.
In a comment to the Australian Financial Review, local Adelaide agent and auctioneer Mark Sheppard remarked that while population growth is certainly fuelling Adelaide’s market, prices haven’t risen to stellar heights because they came from such a low point.
According to Corelogic’s hedonic home value index, the median dwelling price in Adelaide is $593,883. This may still seem out of reach for many, but compared to Sydney’s deeply distressing $1,116,219, it’s much more doable for the average Australian mortgage price (about $600,000).
Even outside Adelaide’s CBD, a budget of $600,000 is ample for a wide variety of family homes, close to nature with options for transport and schools. Recent REA data revealed 138 Adelaide metropolitan suburbs with houses below the current median house price, making them an absolute magnet for keen buyers.
Price comparison: how much home loans cost in different Australian capital cities
For a clearer picture of how much a home loan could cost in different Australian capital cities, let’s make a comparison table.
First, we’ll standardise the terms of our theoretical home loans. According to Mozo’s database, the median variable interest rate is 2.71% p.a. We can also take a typical term of 25 years and say we’re borrowing the exact same amount as the median dwelling price (according to Corelogic).
If we plug all this data into Mozo’s mortgage repayment calculator, we get the following results:
City | Median dwelling price | Monthly repayment | Total interest repayable |
Sydney | $1,116,219 | $5,126 | $421,705 |
Canberra | $909,379 | $4,176 | $343,561 |
Melbourne | $799,756 | $3,673 | $302,146 |
Hobart | $724,366 | $3,327 | $273,664 |
Brisbane | $722,433 | $3,318 | $272,933 |
Adelaide | $593,883 | $2,728 | $224,368 |
Perth | $535,335 | $2,459 | $202,248 |
Darwin | $495,573 | $2,276 | $187,226 |
This illustrates the impact prices could have on home loan costs over time. While this is only a rough estimate using average parameters (after all, variable interest rates are variable), it indicates which capitals could potentially give you the biggest bang for your buck.
Research is a vital part of home-buying prep, so be sure to head over to our home loans guides section for more information. You can also compare home loans below.
Compare and save on home loans - last updated 2 May 2024
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, LVR <80%
variable rate
comparison rate
Initial monthly repayment5.99% p.a.5.90% p.a.Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
CompareCompareUnloan Variable
Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
- variable rate
- 5.99% p.a.
- comparison rate
- 5.90% p.a.
- variable rate
- 5.99% p.a.
- comparison rate
- 5.90% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
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Flex Home Loan
Owner Occupier, Principal & Interest, LVR <60%
variable rate
comparison rate
Initial monthly repayment6.19% p.a.6.43% p.a.Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
CompareCompareFlex Home Loan
Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
- variable rate
- 6.19% p.a.
- comparison rate
- 6.43% p.a.
- variable rate
- 6.19% p.a.
- comparison rate
- 6.43% p.a.
- Upfront fees
- $250
- Ongoing fees
- $250.00 yearly
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- -
- maximum borrowing amount
- -
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the ubank Flex Home Loan
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Elevate
Owner Occupier, Principal & Interest, <80% LVR
variable rate
comparison rate
Initial monthly repayment6.09% p.a.6.20% p.a.Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.
CompareCompareElevate
Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.
- variable rate
- 6.09% p.a.
- comparison rate
- 6.20% p.a.
- variable rate
- 6.09% p.a.
- comparison rate
- 6.20% p.a.
- Upfront fees
- $498
- Ongoing fees
- $0.00
- Discharge Fee
- $325.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- Optional extra - $10 per month
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $5,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Aussie Elevate
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Basic Home Loan
Owner Occupier, LVR<60%, Principal & Interest
variable rate
comparison rate
Initial monthly repayment6.14% p.a.6.16% p.a.Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.
CompareCompareBasic Home Loan
Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.
- variable rate
- 6.14% p.a.
- comparison rate
- 6.16% p.a.
- variable rate
- 6.14% p.a.
- comparison rate
- 6.16% p.a.
- Upfront fees
- $350
- Ongoing fees
- $0.00
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Macquarie Basic Home Loan
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Mortgage Simplifier
LVR<80%, Owner Occupier, Principal & Interest
variable rate
comparison rate
Initial monthly repayment6.14% p.a.6.17% p.a.Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.
CompareCompareMortgage Simplifier
Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.
- variable rate
- 6.14% p.a.
- comparison rate
- 6.17% p.a.
- variable rate
- 6.14% p.a.
- comparison rate
- 6.17% p.a.
- Upfront fees
- $299
- Ongoing fees
- $0.00
- Discharge Fee
- $250.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the ING Mortgage Simplifier
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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
^See information about the Mozo Experts Choice Home Loan Awards
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