Fewer than 20 Melbourne suburbs currently have a median house price below $600,000, the threshold for the state’s first-home buyer assistance program
Entry-level house prices in Australia’s major cities are rising sharply as cost-of-living pressures and higher interest rates push buyers towards more affordable housing markets.
Homes priced under $600,000 are becoming increasingly difficult to find, while properties priced under $400,000 have almost disappeared in the country’s five largest cities, according to PropTrack data.
PropTrack economist Angus Moore explained that competition for affordable housing has intensified.
“With house prices rising faster in cheaper areas over the past two years and interest rates higher, housing affordability has reached its worst level in decades,” he said.
Some of the biggest changes have occurred in Adelaide, once considered one of Australia’s most affordable housing markets. The report shows the number of city suburbs with an average house price of less than $500,000 has shrunk to just six, most of which are more than 25 kilometres north of the city centre.
In Melbourne, while prices have fallen in many areas, entry-level home prices have continued to rise. PropTrack found that fewer than 20 Melbourne suburbs now have a median house price below $600,000, the threshold for the state’s first-home buyer assistance program.
Sydney is also feeling the pinch, with only semi-rural areas on the Central Coast offering homes below $600,000. In addition, only 19 Sydney suburbs have a median apartment price below $500,000.
Affordable housing options are also limited in Brisbane, with only three suburbs having a median house price below $500,000 and five suburbs having a unit price below $400,000.
Meanwhile, Perth house prices have risen fastest over the past year, with an average increase of nearly 20 per cent. The cheapest suburb to buy a home in Perth is Brookdale, where the median house price is $540,000.
“Similar trends are being seen across Australia,” Moore noted. “One of the most important drivers of the housing market is affordability. In the current environment, we are seeing more buyers looking for more affordable options. We are also seeing more affordable capital cities perform better and within those capital cities, more affordable regional areas perform better. This means first-home buyers face greater difficulties.”