35 best countries to buy a home: Where does Australia rank?

First home buyers in Hungary and Slovenia have better opportunity than those in Australia (Source: Getty)

Buying a first home is a milestone in a person's life, however Aussie first home buyers have been getting priced out of the market.

But, what if you were better off buying a home overseas as an investment? Where would be the best place to look?

Compare the Market compiled data to evaluate disposable income to the cost of living, how much home prices have risen since 2015, the long term investment rating, average mortgage interest rates and percentage of homes owned.

• Also read: How to save $3,565 on your home loan with this simple trick

• Also read: Aussie house prices up 16% in a year but are ‘losing steam’

• Also read: Revealed: The 6 top (and cheapest) mortgages for investors

So, here is a list of the best countries to buy a home if you’re looking offshore.

35 best countries for first home buyers

Out of the countries assessed Australia ranks 27th on the list of best places for first home buyers. Here is the complete list:

1. Slovakia

2. Hungary

3. Lithuania

4. Latvia

5. Italy

6. Estonia

7. Slovenia

8. Czech Republic

9. Poland

10. German

11. Chile

12. Portugal

13. Netherlands

14. Austria

15. Belgium

16. France

17. Canada

18. United States

19. New Zealand

20. Finland

21. Spain

22. Luxembourg

23. Philippines

24. United Kingdom

25. Greece

26. Ireland

27. Australia

28. Switzerland

29. Norway

30. South Korea

31. Japan

32. Denmark

33. Sweden

34. Iceland

35. Mexico

What makes Slovakia, Lithuania and Hungary great places to buy?

Slovakia has seen a recent housing boom, with property values increasing 148 per cent since 2015.

This shows a healthy demand of active home buyers, reflected by the higher ownership rate, Compare the Market said.

Although it’s difficult to predict how the housing market will fare in the coming years, Slovakia had a strong foundation for the residential market to develop prior to COVID-19.

Hungary’s 181 per cent increase in house prices indicates a fast growing housing market buoyed by favourable conditions, including:

• low mortgage interest rates

• higher wages

• high employment rates

In other words, the housing market is supported by a healthy economy in which homebuyers are actively purchasing properties.

And finally, demand in Lithuania’s housing market is moderately high with a purchase price increase of 147 per cent since 2015.

While the investment rating is lower than the other countries, the average Lithuanian spends 71.7 per cent of their disposable income on cost-of-living expenses – the lowest percentage out of every country.

With 28.3 per cent of their disposable income leftover, the average Lithuanian should be able to comfortably afford their cost-of-living expenses, and more.

How does Australia’s property market compare?

According to Compare the Market home prices in Australia has risen 116 per cent since 2015 but with an outright ownership rate of only 30 per cent.

This puts us behind other countries like Hungary (79 per cent) and Latvia (68 per cent) where outright ownership is much higher.

Additionally, Australia only ranks two out of five for long term investment - this may have something to do with soaring values, that may say are overpriced.

Australian house prices have continued to rise despite lockdowns sweeping the nations, and prices have risen at their fastest pace since July 1989.

According to CoreLogic’s latest figures, national dwelling values rose 1.5 per cent in August, and while the figures continue to climb, the rise has been ‘losing steam’ for months - potentially pointing towards values begin overinflated.

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