The lure of a new life in a different capital city is especially tempting for those fed up with financially treading water just to pay the bills.
But soaring housing prices in the smaller states means it’s a costly switch in cities you might least expect.
Tens of thousands of Melburnians fled during heavy Covid lockdowns in 2020 and 2021, at a time when homes in Melbourne were the second most expensive of all the capital cities, behind Sydney.
Homes in Adelaide, Brisbane and Perth have overtaken Melbourne, and aren't too far behind Sydney. Picture: Getty
Since then, home prices in Brisbane, Adelaide and Perth have soared, pushing Melbourne down the rankings and completely reshaping what an affordable capital city looks like in Australia.
This is reflected in PropTrack’s Home Price Index report for July, with national home prices now sitting at a record high of $827,000 after climbing 4.3% over the past 12 months.
Capital city median home values
| Capital city | Median dwelling | Median House | Median Unit |
| Sydney | $1,194,000 | $1,564,000 | $860,000 |
| Brisbane | $919,000 | $1,067,000 | $715,000 |
| Perth | $847,000 | $926,000 | $584,000 |
| Adelaide | $845,000 | $916,000 | $632,000 |
| ACT | $835,000 | $959,000 | $590,000 |
| Melbourne | $824,000 | $983,000 | $609,000 |
| Hobart | $665,000 | $710,000 | $581,000 |
| Darwin | $531,000 | $604,000 | $410,000 |
As the data shows, it's no longer a simple matter of selling up in Sydney or Melbourne to reap the gains in smaller capitals like Brisbane or Adelaide.
But for homeowners in these booming smaller capital cities looking to move to the 'big smoke', Melbourne now offers a more affordable lifestyle switch than it did five years ago.
“For someone looking to rent or buy a home, Melbourne is more cost effective than other states right now,” REA Group senior economist Anne Flaherty said.
“Melbourne also has the second biggest economy in Australia and with its diverse economy for jobs and education, it’s a huge drawcard for those looking to move interstate."
Population data from the Australian Bureau of Statistics shows more Aussies were still moving away from Melbourne than to it over the year to June 2024.
Brisbane and Perth were the only capitals to have net internal migration gains, which calculates the number of people moving there from another part of Australia, less the number departing.
And that means less bang for buck for city-switchers eyeing off these lifestyle locations.
For example, a seller looking to move from Melbourne to Brisbane can expect to trade like-for-like, rather than upgrading land size, location or home condition for the same sale price.
As an example, 168 Roberts Street in Melbourne's leafy Yarraville, located roughly 9km from the CBD, sold for $1.025 million this week.
This neat family home in Melbourne's Yarraville won't get you a mansion in many blue-chip capital city suburbs. Picture: realestate.com.au/sold
Compare that to the $1.06 million sale of 68 Eliza Street in Brisbane's blue-chip Clayfield, around 10km outside of the CBD, which is of similar condition and a similar block size.
This home in Brisbane's Clayfield sold for $1.06m in August, on par with the city's median house price. Picture: realestate.com.au/sold
While Adelaide did lose slightly more Aussies to other parts of the country than it gained in the 2024 financial year, Ms Flaherty noted this long-term trend was reversed during Covid.
“What’s interesting about Adelaide is that for the first time in a decade, South Australia saw positive net interstate migration which grew considerably during the pandemic,” Ms Flaherty said.
“Therefore, a lot of people who might have lived in Melbourne who returned to Adelaide which put pressure on rentals and home buying as a result – that impact is still being felt,” she said.
Value in the north and south
Hobart's significant price correction following a pandemic-driven boom now makes it one of the most affordable capital cities, followed only by Darwin.
“Hobart doesn’t see the level of population growth that other capital cities do, but it’s still an attractive place to live,” Ms Flaherty said.
"Home values are still sitting about 7.5% below their peak level – and it’s the market that’s seen the biggest drop from its peak."
For the same $1.02m price as the Yarraville home in Melbourne, a buyer could snap up a spacious contemporary family home within 4kms of Hobart's CBD.
Or an "architectural masterpiece" in the centre of town, dating back to 1880.
The grand historic home 'Alyth' in the centre of Hobart sold for $1.02m in January. Picture: realestate.com.au/sold
Meanwhile Darwin offers the most affordable capital city homes, with a typical property fetching less than half that of a home in Sydney.
But strong buyer demand is supporting price growth in the Northern Territory capital, where the value of investor lending jumped by about 20% in the June quarter, and was more than twice as high as the same period last year.
"It’s seeing strong growth in the inner market and investors are looking at Darwin as an affordable place to buy,” Ms Flaherty said.
Darwin remains affordable, but property prices are tipped to rise sharply this year and next. Picture: Getty
“There’s low vacancy rates, properties rent out well and rental yields are attractive so it’s a bit of a turnaround for up the top end.”
Newly updated property price forecasts from ANZ predict Darwin home prices will surge a total 14.3% this year, and a further 6.1% in 2026.
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