The key drawcard for property buyers in Australia's capital city markets

Residential property price growth in FY24 was strongest in the lower price brackets of every capital city except Darwin, data from CoreLogic has revealed. Meantime, the mid-tier capital cities of Perth, Brisbane and Adelaide continue to lead the nation in overall value growth. Many home buyers and investors are gravitating toward cheaper suburbs that offer greater affordability due to ongoing price rises and higher interest rates constraining borrowing capacity.

“After recording a higher rate of gain through the early months of the growth cycle, conditions have faded across the upper quartile as borrowing capacity reduced and affordability constraints deflected demand towards middle-and-lower-priced properties,” said CoreLogic research director, Tim Lawless.

Over the past three months, apartment prices have also risen faster than houses in every city bar Darwin and Canberra, indicating more home buyers are compromising on the type of property they buy.

“Most cities now have a median house value that is at least 1.5 times higher than the median unit value,” Mr Lawless said. “With stretched housing affordability, lower borrowing capacity and a lift in both investor and first home buyer activity, it’s not surprising to see the unit sector outperforming for a change.”

REA Group economic analyst Megan Lieu said affordability was “now a key drawcard for buyers”.

“Demand from buyers has been high in the past year due to a number of factors that include strong population growth, increased confidence in the market and scarce rental availability,” Ms Lieu said. “Prices are expected to keep rising in the coming months due to strong demand. However, as housing affordability declines, buyers will likely continue gravitating towards more affordable areas.”

Ms Lieu said REA analysed FY24 search data from its website, realestate.com.au, to identify the ‘affordable’ hot spot suburbs of each capital city. The analysis focused on suburbs with median house and apartment prices below their capital city’s medians, and identified the most popular suburbs based on search volumes.

Here are the results.

Sydney

Sydney’s median house price is $1,407,000. The three most popular affordable suburbs for houses were Blacktown (median $980,000), Campbelltown ($855,000) and Oran Park ($1,080,000).

Sydney’s median apartment price is $775,000. The three most searched affordable suburbs were Blacktown ($530,000), Ryde ($738,000) and Hornsby ($708,000).

Melbourne

Melbourne’s median house price is $870,000. The three most searched affordable suburbs were Frankston ($740,000), Sunbury ($660,000) and Craigieburn ($640,000).

Melbourne’s median apartment price is $605,000. The most popular affordable suburbs in FY24 were Melbourne CBD ($560,000), Richmond ($590,000) and Hawthorn ($584,000).

Brisbane

Brisbane’s median house price is $840,000. The most popular affordable suburbs were Redcliffe ($770,000), North Lakes ($809,000) and Narangba ($780,000).

Brisbane’s median unit value is $555,000. The most searched affordable suburbs were Nundah ($535,000), Wilston ($550,000) and Kedron ($535,000).

Brisbane

Adelaide

Adelaide’s median house value is $751,000. The most searched affordable suburbs were Mawson Lakes ($725,000), Modbury ($701,000) and Mount Barker ($661,500).

Adelaide’s median unit price is $501,000. The most popular affordable suburbs were Adelaide CBD ($479,000), West Beach ($495,000) and Mawson Lakes ($440,000).

Perth

Perth’s median house price is $680,000. The most popular affordable suburbs were Baldivis ($611,000), Rockingham ($610,000) and Morley ($676,000).

Perth’s median unit price is $450,000. The affordable suburbs with the highest search volumes in FY24 were Wembley ($330,000), Mount Lawley ($430,000) and Yokine ($430,000).

Hobart

Hobart’s median house price is $700,000. The most popular affordable suburbs were Geilston Bay ($693,500), Moonah ($610,000) and Glenorchy ($558,000).

Hobart’s median apartment value is $531,000. The most searched affordable suburbs were New Town ($455,000), Glenorchy ($440,000) and Sorell ($507,000).

Darwin

Darwin’s median house price is $568,000. The most popular affordable suburbs in FY24 were Zuccoli ($530,000), Durack ($550,000) and Wulagi ($528,000).

Darwin’s median unit price is also $568,000. The most searched affordable suburbs were Darwin CBD ($440,000), Nightcliff ($382,000) and Fannie Bay ($502,000).

Canberra

CANBERRA

Canberra’s median house price is $950,000. The most searched affordable suburbs for houses were Kambah ($850,000), Gungahlin ($900,000) and Casey ($815,000).

Canberra’s median unit price is $605,000. The most popular affordable suburbs were Braddon ($582,000), O’Connor ($531,000) and Lyneham ($520,000).

Australia’s housing crisis will not be solved by first-home buyer incentives or tax changes alone, with leading property figures warning governments must tackle supply constraints if affordability is to improve.

Speaking at the Kanebridge Quarterly Property Leadership Summit in Sydney last week, expert project marketing specialist Sam Elbanna, property investor and fund manager Paul Miron and property consultant Karla McNeice said that a lack of housing supply remained the central issue facing the market.

Elbanna, Director of CPM Realty with more than 30 years’ experience in project sales, argued that successive governments had focused too heavily on stimulating demand rather than addressing the barriers preventing new housing from being delivered.

“The misconception is that politicians think the way to solve the housing crisis is to drive demand,” he said.

“The reality is that’s not the way. This is a supply-side problem, and it needs to be solved on the supply side.”

Drawing on his experience in project sales, Elbanna said policies designed to help first-home buyers often had unintended consequences, pointing to previous grants that ultimately flowed through to higher property prices.

Instead, he said developers were facing increasing red tape, approval delays and rising costs, which were discouraging new housing supply.

“In the absence of stock, demand exceeds supply,” he said.

Miron, a Co-Founder and Fund Manager of Msquared Capital, said the housing debate had become overly focused on tax policy while overlooking broader structural issues.

He argued that affordability challenges stemmed from a combination of factors, including planning constraints, supply shortages, migration levels and interest rates.

“No-one can be 100 per cent certain on the real reason for property prices is going up,” he said.

“The reason why property prices are higher is a combination of interest rates, lack of supply, migration, vacancy rates and maybe taxes play a role.”

Miron was critical of recent federal housing policy changes, warning they could reduce the number of new homes being built and further constrain supply that was even highlighted in the budget.

He also highlighted the importance of the property sector to the broader economy, noting that residential real estate and related industries employed more than one million Australians.

McNeice, who advises developers on sales strategy and market intelligence, said understanding buyers had become increasingly important as affordability pressures intensified.

While affordability remained a major consideration, she said today’s buyers were focused on value rather than simply price.

“People are looking for value for money,” she said.

She said buyers were increasingly evaluating factors such as transport connections, walkability, nearby amenities and flexible living spaces that could accommodate changing family needs.

“What infrastructure is going on? Can I walk to the shops? Can I meet people at the local cafe?” she said.

The panel also discussed the mounting pressures facing developers, with Elbanna arguing that many projects become financially unviable from the moment a site is purchased.

“The viability of a development happens at the moment the site is bought,” he said.

He said rising construction costs, higher interest rates and overly optimistic feasibility assumptions had left some developers exposed as market conditions changed.

While acknowledging the growing number of smaller and first-time developers entering the market, Elbanna said property development required expertise across finance, construction, marketing and legal disciplines.

“It is actually a business that requires a level of expertise,” he said.

Looking ahead, the panel agreed opportunities remained in the market despite current challenges.

Miron said property should continue to be viewed as a long-term investment and cautioned against trying to time short-term market movements.

McNeice said success would increasingly depend on identifying projects that genuinely met changing buyer expectations.

Elbanna said affordable housing remained achievable, but developers needed to deliver more than just homes.

“We can provide affordable housing in this country,” he said.

“But we’ve got to wrap that affordable housing with the things that people want.”

As Australia’s housing affordability debate intensifies, the panellists agreed on one point: without a meaningful increase in housing supply, demand-side measures alone are unlikely to solve the nation’s property challenges.

The key drawcard for property buyers in Australia’s capital city markets

The latest data from CoreLogic has identified the most affordable suburbs attracting buyers around the country

Australia’s housing affordability crisis is being fuelled by chronic undersupply, planning delays and rising development costs, as politicians continue to focus on the wrong solutions.