The great Australian dream of owning a home is becoming an increasingly distant reality for many, as new data reveals a dramatic shrinking of affordable housing options across the nation.
There are now a mere 422 Australian suburbs where buyers can still snag an average house for under $500,000 – a stark decline from 501 just four months ago, and a staggering 1753 in 2020.
To put that into perspective, Australia boasts 6689 house suburbs, meaning less than 6.3 per cent of the country’s housing markets offer a median house price below the half-million-dollar mark.
The grim figure, unveiled in the latest REA Market Trends report for March, underscores a significant shift in what was once considered a reasonable and attainable mortgage.
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The average Australian house now sells for $996,000, with units fetching $730,000.
REA Group senior economist Eleanor Creagh said the great Aussie dream of owning an affordable home – particularly in metro regions – was eroding.
“Median house prices across every capital city now sold well above $500,000, meaning buying a detached home at that price point in a capital city has become harder,” she explained.
“In the most expensive capitals, a sub $500,000 budget can still buy a unit in a handful of Sydney and greater Brisbane suburbs, but the options are narrow and mostly confined to more affordable outer ring locations.
“As a result, the sub $500,000 price point is increasingly pushed out of the house market and sits at the lower end of the apartment market in most cities.”
Ms Creagh noted that units have become the primary entry point for many first home buyers as house prices have escalated and affordability has deteriorated.
“Houses at that price point are now extremely rare, particularly in established suburbs close to major employment centres or transport and infrastructure,” she added.
Where to find a bargain: A State-by-state breakdown
Despite the national trend, some pockets of affordability remain, though often requiring a move away from major metropolitan hubs.
VICTORIA
Victoria is leading the nation in terms of affordability, with 106 markets still recording median dwelling prices under $500,000.
However, only 27 of these are located within Melbourne and are exclusively unit markets. Buyers looking to secure a house for less than half a million dollars will need to cast their gaze towards the state’s regional centres, such as Nhill, where homes command a median of $260,000.
PropTrack Home Price Index – February 2026
QUEENSLAND
In Queensland, buyers have 99 markets with medians under $500,000 to choose from.
The only metropolitan suburb on this list offering houses is Russell Island, where the median house price sits at $475,000.
Regional bargain hotspots include Hughenden ($172,500), Charleville ($210,000), Longreach ($295,000), Ingham ($342,500), and Port Douglas ($390,000).
NEW SOUTH WALES
For those in New South Wales hoping to secure a bargain in or near Sydney for under $500,000, the options are limited to units in suburbs like Carramar, Fairfield, Mount Druitt, Cabramatta, Merrylands West, Warwick Farm, and Guildford.
The state’s cheapest housing market is found in Ravenswood, with a median of $161,000.
A new homebuyers attends an auction. Picture: Sam Ruttyn
SOUTH AUSTRALIA
Ravenswood is also Australia’s second cheapest housing market, sitting behind Coober Pedy in South Australia, where houses still sell for an astonishing $82,500.
The outback town is one of just 42 markets in SA still offering homes for under $500,000, including Adelaide suburbs such as Tonsley, Kurralta Park, and Brooklyn Park.
TASMANIA
In Tasmania, buyers have 24 markets to choose from, including New Town, Bridgewater, and Brighton in Hobart, and Riverside and Scottsdale in Launceston.
NORTHERN TERRITORY
The Northern Territory, currently grappling with Australia’s most acute housing supply crisis, offers only 28 markets with prices under $500,000.
Bargain hotspots include Karama, Gray, Coolalinga, and Millner – all of which are unit markets.
Western Australia still boasts 33 markets with homes under $500,000, while the ACT has a mere five.
Cheaper homes outperforming more expensive properties
Ray White Group Chief Economist Nerida Conisbee observed a significant trend across Australia’s capital cities: cheaper homes, those in the bottom quartile of the market, have outperformed more expensive properties over the past year.
This, she said, reflects a substantial amount of capital flowing into lower-priced housing. The divergence is particularly pronounced in Sydney.
Source: Ray White
“The gap between price growth at the lower and upper ends of the market is the largest among the capital cities, highlighting how strongly the current housing cycle is being driven by demand for the most affordable homes,” Ms Conisbee stated.
She noted a historical reversal in this trend.
“Historically, this has not been the typical pattern. Over the past two decades, price growth in Sydney has more often been led by more expensive homes, with the gap between top-and bottom-priced properties frequently negative,” Ms Conisbee said.
“This was particularly evident during the major housing booms of the mid-2010s and the pandemic years, when premium suburbs consistently outperformed the rest of the market.
“The current cycle therefore represents a notable reversal. With cheaper homes now outperforming by around four to five percentage points, price growth is increasingly concentrated in the lower end of the market.”
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