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Byron Bay recommended as 'affordable' place for first home buyers despite expensive house prices

Byron Bay has been recommended as an affordable place for first-home buyers despite having Australia's most expensive median regional house price of $1.3million.

The Members' Equity Bank, owned by industry superannuation funds, recommended 20 regional towns for property newcomers looking for a lifestyle change after the coronavirus pandemic.

With Australia no longer officially in recession, first-home buyer activity is at the highest level in more than a decade.

Home loan levels have hit a new record high with interest rates at a record low.

The ME Bank list of 'affordable' housing included some very expensive places to live with Byron Bay coming in at No. 12 despite CoreLogic data showing the bohemian northern New South Wales coastal town having a median house price of $1.3million.

The ME Bank has recommended Byron Bay as an affordable place for first-home buyers despite having Australia's most expensive median house price of $1.3million. Pictured is a two-bedroom house selling for $1.25million

The so-called affordability report also recommended Kiama on the NSW South Coast, putting it at No.5 on the list, even though it has a median house price of $817,851. Pictured is a four-bedroom house selling for $880,000 to $910,000

At that price, buyers would struggle to find a two-bedroom house. 

Regional areas deemed as 'affordable' for first home buyers

1. Nairne, South Australia

2. Bungendore, New South Wales

3. Margaret River, Western Australia

4. Mount Barker, South Australia

5. Kiama, New South Wales

6. Woodend, Victoria

7.  Beechworth, Victoria

8. Dunsborough, Western Australia

9.  Tatura, Victoria

10. Lennox Head, New South Wales

11.  Kilmore, Victoria

12.  Byron Bay, New South Wales

13.  Tanunda, South Australia

14.  Nurioopta, South Australia

15.  Mansfield, Victoria

16. Airlie Beach-Cannonvale, Queensland

17.  Wangaratta, Victoria

18. Port Fairy, Victoria

19. Mullumbimby, New South Wales]

20. Castlemaine, Victoria

Source: ME Bank report on affordable regional towns, November 2020

The ME Bank report acknowledged Byron Bay was expensive but didn't make the affordability case for millionaire actor Chris Hemsworth's adopted home town.

'A number of towns lower down in the top 20 (such as Byron Bay) have higher median house prices,' it said.

'With housing affordability carrying double weighting, this contributed to their lower rankings.'

The towns were rated as being suitable for young people, working from home, who wanted good internet connectivity and proximity to good schools, hospitals and a major population centre as part of their sea change or tree change.

Nearby Lennox Head was in tenth spot, despite its median house price of $934,264 being only a shade less than Sydney's mid-point of $1,000,170.

A short drive away, the anti-vaxxer hinterland town of Mullumbimby, with a slightly more affordable median house price of $701,494, came in at No. 19.

The so-called affordability report also recommended Kiama on the NSW South Coast, putting it at No.5 on the list, even though it has a median house price of $817,851.

First home buyers wanting a house in an idyllic would be much better off in north Queensland.

Despite having a much more affordable median house price of $414,192, Airlie Beach came in at 16 on the list.

On the other side of the country, the West Australian surfing and wine-making town of Margaret River, with a median house price of $441,889, was in the third spot.

The Adelaide Hills town of Nairne, with a median house price of $401,340, was considered the best place for first-home buyers.

It is also just 30km from central Adelaide.

The southern NSW town of Bungendore, with a median house price of $663,109, was in second place. 

The town of hobby farms is also just 30km from Canberra.

The ME report on affordability criteria for first home buyers didn't just look at price.

Analysts also considered the share of higher-paying white collar jobs in each town and the proportion of residents with a university degree.

The Adelaide Hills town of Nairne, with a median house price of $401,340, was considered the best place for first-home buyers. Pictured is a four-bedroom house selling for$399,000

First home buyers wanting a house in an idyllic would be much better off in north Queensland. Despite having a much more affordable median house price of $414,192, Airlie Beach came in at 16 on the list. Pictured is a three-bedroom house at nearby Cannonvale selling for $535,000

In October, first-home buyers comprised 31.5 per cent of all owner-occupier commitments, the highest in 11 years, Australian Bureau of Statistics lending finance data showed.

The value of new housing loans also hit a record high. 

Loans to build new homes have also climbed by 80 per cent during the past year, as a result of state government incentives and record-low interest rates. 

Australia's average mortgage for owner-occupiers stood at $512,500, a CommSec analysis of official figures showed. 

The Reserve Bank of Australia in November cut interest rates to a new record-low of 0.1 per cent and three of Australia's big four banks are offering fixed home loan interest rates of less than two per cent.

On the other side of the country, the West Australian surfing and wine-making town of Margaret River, with a median house price of $441,889, was in the third spot. Pictured is a three-bedroom house selling for $489,000

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