Only 501 suburbs remain for buyers under $500,000 as affordability crisis deepens – realestate.com.au

There are now just 501 Australian suburbs where buyers can buy an average home for less than $500,000 – down from 658 a year ago and 1753 in 2020.

To put that figure into perspective: there are 6,689 housing estates spread across the country.

The dismal figure was revealed in the latest REA Market Trends report for November, marking a dramatic decline in what was once considered a reasonable and achievable mortgage.

It comes as the latest PropTrack Home Price Index showed national house prices hit a new record in November, rising from 0.5 per cent to 8.7 per cent higher compared to 12 months ago.

REA Group senior economist Eleanor Creagh said that even with a dip in growth rates last month, house prices were still growing at a solid pace.

“We have seen home prices continue to rise at a rapid pace, with the monthly growth rate slowing somewhat in markets that see a large increase in shares for sale in November,” she said.

“This year’s series of rate cuts has increased borrowing capacity and improved sentiment, creating renewed momentum in the housing market.

“Continued population growth, increased investor and upgrader activity, and of course the extended home warranty scheme, are also driving demand.”

Average house prices in Melbourne and Sydney rose slightly more slowly in November than in previous months, by 0.2 percent and 0.4 percent respectively.

This followed a 29.5 per cent month-on-month increase in new property listings in Melbourne in October, and a 20.1 per cent increase in new property listings in Sydney.

Adelaide saw the strongest month-on-month house price growth in the country in November, rising 0.9 per cent over the month.

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Adelaide continues to rise in terms of price

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Perth followed Adelaide with the second strongest house price growth in Australia in November, with the city’s average house price rising 0.89 per cent over the month.

Brisbane (0.64%), Canberra (0.56%), Darwin (0.25%) and Hobart (0.16%) also posted month-on-month gains in November.

All regional markets except the regional Northern Territory (-0.1%) also grew in November.

Australia’s combined regional property markets outperformed the capital cities last month, rising 0.6 percent and 0.48 percent respectively.

The Market Trends report shows there are now just 109 housing estates with an average price of $500,000 or less in NSW, with the cheapest homes in the Far West and Orana region.

In NSW, the cheapest place to buy a house is Brewarrina, with the average house selling for $104,000.

15 Wilson Street, Brewarrina, is on offer

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South Australia now has just 65 suburbs under $500,000, ranging from the outback city of Andamooka ($65,000) to Hamley Bridge in the Barossa-Yorke-Mid North region ($500,000).

142 Brooks Court, Andamooka is offered

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Victoria has 95 housing estates under $500,000, none in the Greater Melbourne region.

The cheapest suburb to buy a house is in Jeparit, in the northwest of the state ($158,000).

There is nada in Greater Melbourne. Image: Supplied by Knight Frank

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The Northern Territory has 20 suburbs with an average house price of less than $500,000 – the cheapest being Dundee at $250,000.

There are five suburbs in Darwin itself, including Lee Point, Berrimah, Berry Springs, Moulden, Acacia Hills, Gray, Virginia and Woodroffe.

But when it comes to current deals under $500,000, good luck.

Queensland has 118 suburbs with a median house price of $500,000 or less, ranging from $67,500 in Dirranbandi to $500,000 in Goondiwindi, Sun Valley, Innisfail Estate, Oakey, Cullinane and Maryborough.

7 Terka Street, Innisfail Estate, sold in May for $500,000

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Only three Brisbane suburbs make it, none on the mainland: Russell Island ($445,000), Lamb Island ($457,500) and Macleay Island ($495,000).

13 Kings Rd, Russell Island, is listed at $499,000

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There are 39 suburbs under the $500,000 threshold in Tasmania, but unlike the other states there are still a few options in the Hobart region, including Gagebrook ($380,250), Herdsmans Cove ($385,000), Bridgewater ($425,000), Risdon Vale ($470,000), New Norfolk ($470,000), Primorose Sands ($ 480,500) and Chigwell ($500,000).

9 Boronia Place, Gagebrook, recently sold for $491,000

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Meanwhile, Western Australia’s sub-$500,000 suburbs have shrunk to just 54, ranging from Norseman in the Outback South region ($105,000) to Harvey in Bunbury and Toodyay in the Wheat Belt, both at $500,000.

Norseman recorded the highest growth in average home values ​​in the 12 months to November, with an increase of a whopping 121 percent.

66 Goodliffe Street, Norseman, sold in August for $120,000

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Seven suburbs, including Norseman, with a median house value of $500,000 or less, have seen values ​​increase by more than 50 per cent in the past 12 months: Millchester (Qld), Wilmington (SA), Springsure (Qld), Merredin (WA), Tarpeena (SA) and Riverton (SA).

In the past three months alone, South Kempsey on the NSW Mid North Coast recorded a 91.1 per cent price growth to $440,000.

It comes after the annual PropTrack Housing Affordability report found that housing affordability remained at its worst level on record, despite a slight improvement this year, although experts predict affordability will deteriorate further in 2026.

Real Estate Buyers Agents Association of Australia (REBAA) president Melinda Jennison said homebuyers, especially first-home buyers, were feeling affordability pressures.

“For many first home buyers, especially in cities such as Brisbane, Perth and Darwin, where property prices have soared over the past year and rental prices remain high, the biggest challenge remains saving a deposit and managing day-to-day living costs,” she said.

“Schemes such as the First Home Buyers Guarantee have certainly helped ease the barrier to making a deposit for some, allowing eligible buyers to enter the market with savings of as little as 5 percent.”

REEBA President and Streamline Property Buyers Director Melinda Jennison

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But Ms Jennison said the real challenge for many now lies in meeting mortgage repayment criteria.

“Even if buyers have access to support to get in, stricter credit ratings continue to hold many people back, especially those without family support or with variable incomes,” she said.

“So while repayments are looking more manageable, home ownership still feels just out of reach for many potential buyers.”

Canstar’s ninth annual Consumer Pulse Report also shows that the cost of housing will be the biggest concern for Aussies in 2026.

The report, which is based on the opinions of more than 2,000 Australians, shows that the cost of housing has been the most common financial concern for Australians for four years in a row, and is now more than double what it was five years ago.