Sydney house prices: shocking gap revealed with other capitals

Sydney property prices have been catapulted to new heights above other capitals, with the average gap between Melbourne and Harbour City prices swelling to nearly $600,000.

That’s up from a nearly $250,000 price gap between the country’s two biggest cities in early 2020, according to PropTrack data.

Sydney house prices were also an average of nearly $500,000 more expensive than those in Brisbane, the country’s next most expensive capital, and $960,000 pricier than Darwin, the nation’s cheapest capital..

These price gaps have created stark differences in what a purchase at Sydney’s $1.56m median house price looks like in capital cities around the country.

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This Croydon house is a typical example of what’s on offer at Sydney’s median house price of $1.56m, if looking in the inner west.

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The same budget would have been enough for this home in Gowanbrae in Melbourne’s north.

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A Sydney house priced at the current median would likely be a duplex on a 300sqm block in a middle-ring suburb such as Padstow, just over 20km from the CBD – or in the Hills District, an older three- or four-bedroom house in a suburb like Kellyville, 36km from the CBD.

Melbourne-based buyers agent Madeleine Roberts of MR Advocacy said this was a sharp contrast to what was on offer in the Victorian capital.

For the same money, a buyer in the suburb of Bentleigh 14km from the CBD, could get a three-bedroom house on about 421sqm. Move to an outer Melbourne suburb like Mount Eliza, and it would be a “beachside oasis”, Ms Roberts said.

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This dated home in Kellyville in Sydney’s Hills District recently sold for $1.575m.

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A similar budget would have been enough for this in Mount Eliza in Melbourne’s outer suburbs.

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REA Group economist Eleanor Creagh said Sydney and Melbourne, once the two most expensive markets in the country, had split over recent years – especially since the pandemic.

Melbourne had generally underperformed while Sydney was one of the markets that was the most responsive to record low interest rate during the period, with prices skyrocketing at 30-year highs over 2021 and early 2022.

In Brisbane, where houses were an average of $390,000 cheaper than in Sydney during March 2020 and are now $497,000 cheaper, $1.56m would be enough for a three-bedroom house within an inner suburb such as Paddington, or for a fairly substantial house in a suburb like Morningside, 6km from the CBD.

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This Morningside home, about 6km from the Brisbane CBD, sold for $1.5m.

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A purchase at Sydney’s median price would be enough for a three- or four-bedroom modern house in a coveted coastal Adelaide suburb like Henley Beach, 13km from the CBD.

Ms Creagh noted that the larger dollar difference in prices among capitals did mask the fact that smaller capitals, in percentage terms, had been growing faster than Sydney over recent years. This trend has continued this year and capitals like Brisbane, Perth and Adelaide were catching up.

This home in Adelaide suburb Henley Beach sold for just under Sydney’s median house price.

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Propertyology head of research Simon Pressley said Sydney’s price premium and the better value on offer in other parts of the country may be driving residents to move elsewhere.

“Australia concentrated large portions of its financial capital into Sydney,” he said. “Compared to other capital cities, this economic nerve centre has consistently had higher home values.

“Sydney’s sky-high house prices –– along with the time people waste commuting around its congested transport networks –– is the primary reason internal migration produced an enormous net population decline of 277,000 over the last decade.”

Some of the reasons Sydney remains so much pricier than other capitals date back well past the last five years, Mr Pressley added.

In Perth’s middle ring, this home recently sold for $1,595,000.

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“When the First Fleet docked in Botany Bay in 1788, it essentially gave Sydney a 40-60 year urban development headstart,” he said, noting that Sydney had significant infrastructure before any other township.

Denise O’Hara is among those considering a move interstate and is exploring her options in Western Australia after recently selling her childhood home in Revesby for about $1.67 million through LJ Hooker-Padstow principal Lush Pillay.

Ms O’Hara said she loved the area and her parents had stayed at the home for close to 65 years because of the community – which offered some of the best value in Sydney.

With about 570 sqm of land, the property was larger than the typical Sydney property currently listed in that price range, which was part of the reason it ended up selling to a developer. “It’s a shame,” she said. “But that’s Sydney.”

Difference in median house price compared to Sydney’s in the last five years