Best suburbs for first home buyers close to the CBD 2022

Looking for a place to call your first home? Terry Ryder reveals some of the best inner-city suburbs for first home buyers around Australia.

Many aspiring homeowners are looking for an affordable first home close to the city centre. This might be for lifestyle reasons and/or because their career requires them to be close to tall office buildings.

The good news is that there are options in all our major cities – although realistically in the biggest capitals this generally means units rather than houses. In the smaller capital cities, there are good options for houses as well as apartments in locations with good proximity to the CBD.

Those options may become more realistic if the new Federal Government fulfils promises such as the ‘Help to Buy’ scheme which would assist people earning $90,000 ($120,000 for couples) to buy a property by chipping in 30% of the purchase price for existing properties and up to 40% for new builds. The scheme is limited to 10,000 places each year and property values are capped at varying amounts. In Sydney, for example, it’s $950,000 and in Melbourne it’s $850,000.

There is also the First Home Loan Deposit Scheme which allows first home buyers to buy a property using a 5% deposit without needing to pay Lenders Mortgage Insurance (LMI).

With or without Federal Government assistance, it is possible for first-timers to crack the market in near-city areas that offer good amenities and lifestyle options.

→ Related: Check out Canstar’s Bright Starters Report for more location picks for first home buyers in middle or outer ring areas of capital cities or regional locations.

Brisbane

South Brisbane

Median unit price: $490,000

There was a time when a vast oversupply of new apartments meant values were falling and vacancies were high in the South Brisbane precinct. But all that has changed and now rental properties are scarce and rents and prices are rising again. And you can still buy an apartment for less than $500,000 on the doorstep of South Bank, one of Brisbane’s leading lifestyle and entertainment precincts. You can walk across the Victoria Bridge to the Brisbane CBD. Be mindful that the Brisbane River has a tendency to flood.

Fortitude Valley

Median unit price: $415,000

The Valley is notorious for its nightclub/red-light precinct and for the big surplus of apartments which dragged down property values for several years – until recently. Now the oversupply is gone, vacancies are below 2% and values are rising again. Fortitude Valley is close to the CBD and has many lifestyle features. Young buyers need to be mindful that markets like these can readily generate oversupply all over again.

Taringa

Median unit price: $450,000

Taringa is nicely situated in the inner western suburbs of Brisbane. And, after a 40% jump in prices in the past 12 months, the typical house costs close to $1.5 million. For less than a third of that price level you can buy the average apartment – and get to other parts of the city by train or the freeway/tunnel system. The vast Mt Coot-tha Forest green space is nearby.

Sydney

Marrickville

Median unit price: $820,000

This is one of those inner-city suburbs that has made the image transition from troublesome to trendy – and now you pay well over $1.5 million for the typical house. But with a median price of $820,000, units are more attainable and fall within the new threshold of the federal scheme for first home buyers. More than half of all dwelling sales in Marrickville are units. The vacancy rate of 1.3% provides an indication of high demand, which is unsurprising in this well-situated suburb serviced by multiple train lines.

Campsie

Median unit price: $620,000

Can a first home buyer find a home within 10km of the Sydney CBD for as little as $600,000? In the suburb of Campsie, it’s a realistic possibility, with units comprising 80% of dwelling sales and a median price of $620,000. It’s in an area with train services and plenty of green spaces. Eighteen months ago vacancies were around 6% but they’ve dropped rapidly to 2.5%, indicating there’s plenty of demand from people wanting to live here.

Redfern

Median unit price: $920,000

This inner-city suburb has shaken off its negative image and become trendy, with house values rising 30% in the past year. First home buyers have little hope of finding an affordable house but they may be able to find units below $900,000. The location has considerable appeal, being close to the University of Sydney, Moore Park, the Sydney Cricket Ground and the Sydney CBD. Vacancies are very low (around 1%) for inner Sydney.

Canberra

Dickson

Median unit price: $545,000

Apartments in the inner north suburb of Dickson present an affordable way to access good local facilities and all the amenities and employment prospects around Canberra City. Dickson has schools, shopping and green spaces, plus quick access to the vast Canberra Nature Park. The median house price is close to $1 million but typical units are about half the price, despite the recent price uplift. Vacancies are well below 1% and rents are high.

Griffith

Median unit price: $500,000

This is one of Canberra’s most expensive suburbs for houses which have a median price of $2.2 million but apartments are a lot more attainable. Units are popular, with 140 annual sales compared with 42 house sales. Rental vacancies are extremely scarce and rents have jumped more than 20% in the past year. It’s right on the fringe of inner Canberra, with plenty of lifestyle on offer.

Narrabundah

Median unit price: $530,000

This may be true of every Canberra suburb (because the national capital was designed that way) but near-city Narrabundah offers lots of amenities, with expansive green spaces, schools and good community services. The suburb has a median house price of $1.33 million for houses but apartments are more accessible at $530,000. Very low vacancies and rapidly rising rents support the case for buying rather than renting.

Melbourne

Richmond

Median unit price: $660,000

Despite being a happening suburb on the edge of central Melbourne, Richmond remains surprisingly cheap, with median prices of $1.4 million for houses and $660,000 for units. Well over half of sales in a typical year are units and annual price growth in the past year has been higher for units than for houses, according to CoreLogic. Vacancies are low here – around 1.5%. Prices are similar in neighbouring Cremorne.

Hawthorn

Median unit price: $610,000

One of the characteristics of the Melbourne market is the growing gap between house prices and apartment prices. Increasingly, affordability issues will drive more and more buyers towards attached dwellings. Hawthorn, in Melbourne’s inner eastern suburbs, provides a striking example. The median price is $2.6 million for houses and $610,000 for units – and two-thirds of all dwelling sales in the area are units.

North Melbourne

Median unit price: $530,000

If being close to universities, hospitals and the CBD matters to you, North Melbourne is the best-located suburb in the Victorian capital. It offers a high level of relative affordability for such proximity, with median prices of $1.28 million for houses and $530,000 for units. High vacancies have been a negative until recently, but they have dropped a lot (to 2.3%) in the past 12 months.

Hobart

New Town

Median unit price: $535,000

Recent stellar growth is nudging the median house price for inner-city New Town towards $1 million, but typical apartments are in the low to mid $500,000s. Available rentals are almost non-existent and this does not surprise – the suburb, a little north of the Hobart CBD, has good services and amenities, as well as a great location.

West Hobart

Median unit price: $650,000

West Hobart presents a similar equation to New Town – a median house price nudging $1 million but units at more attainable prices. This suburb in the hills immediately west of the city centre is known for its bohemian qualities, attracting musicians and artists for its character and lifestyle.

Sandy Bay

Median unit price: $720,000

With the median price for apartments now above $700,000 (but half the price of typical houses), upmarket Sandy Bay is beyond the aspirations of many Tasmanian first-time buyers – but it demonstrates that apartments can show spectacular growth if the location has the right qualities. The median unit price has risen 31% in the past 12 months, almost in line with the growth for houses in this prestigious inner-city riverside enclave.

Adelaide

Thebarton

Median house price: $775,000

You can’t buy a house within walking distance of the CBD in Sydney or Melbourne for under $1 million, but in Adelaide you can. Thebarton (as well as neighbouring Torrensville and Mile End) abuts the Adelaide CBD but median house prices are in the $700,000s. Lots of lovely streetscapes here, plus ample amenity, being close to Adelaide Airport as well as the CBD and North Adelaide.

Unley

Median unit price: $460,000

This highly-rated inner southern suburb of Adelaide demonstrates the growing gap between houses and apartments, price-wise. You pay $1.4 million for the median-priced house but well under $500,000 for typical units. Vacancies are well below 1%. If you live here, you can walk to the vast green spaces that fringe the Adelaide CBD.

Kensington Gardens

Median unit price: $445,000

Unit sales outnumber house sales two to one in Kensington Gardens, a few kilometres east of the Adelaide CBD. Units are a third of the price of houses and you readily buy here in the $400,000s, within walking distance of Kensington Gardens Reserve. Vacancies are close to zero in this popular area.

Perth

Westminster

Median house price: $390,000

The City of Stirling is a middle-ring Perth precinct with million-dollar suburbs and others with medians in the $700,000s and $800,000s. Westminster is one of the few with a median house price below $400,000. It also sits beside a central services hub which includes shopping centres and community services, which provide both amenities and employment. It abuts the Reid Highway and a TAFE campus in a precinct with multiple school options.

Balga

Median house price: $350,000

The suburb of Balga is another affordable option in the City of Stirling, with a median house price still below $400,000 despite a 15% annual rise. It’s popular for its good location, strong retail offering and a TAFE campus, with around 350 dwelling sales in the past year. Further testimony to its popularity are rental vacancies close to zero and rents rising at a similar rate as house prices.

Mosman Park

Median unit price: $375,000

Inner-city suburbs with houses in over $1 million but units at a fraction of the price present possibilities for young buyers. Perth has many good options, including Attadale, Bicton, Churchlands, Claremont, Cottesloe, East Fremantle and many others. But Mosman Park is a standout, with a median house price of $1,610,000 and a median unit price below $400,000 in a suburb wedged between the river and the ocean, not far from the city centre.

Cover image source: Trzykropy/Shutterstock.com

About Terry Ryder

Terry is the founder and Managing Director of hotspotting.com.au, which he created in 2006 to help investors find the best places to buy. Terry has been a specialist researcher and writer on Australian residential property in a career spanning four decades. During that time he has published four books.