Million Dollar Cities - And Shifting Housing Markets in Australia

The growing trend of million-dollar cities and shifting housing markets in Australia

Australia's housing market is witnessing significant shifts, with some cities nearing the milestone of a million-dollar median house price, while others are experiencing changing price dynamics in comparison to one another. The latest data from PropTrack and CoreLogic is shedding light on these trends, with Brisbane expected to soon join Sydney as the nation's second million-dollar city, while Melbourne's housing market is showing signs of recovery after a period of substantial change.

‍

Brisbane: approaching the million-dollar milestone

According to Terry Ryder’s report for Hotspotting, Brisbane’s housing market has been showing remarkable growth, with the city's median house price reaching a record $977,000 after a 9.6% increase over the past 12 months. This puts Brisbane close to becoming Australia’s second city with a median house price surpassing the million-dollar mark, following Sydney, which stands at a median of $1.425 million, with a more modest 3% growth.

The trend is partly driven by strong interstate migration to Brisbane, as people seek more affordable housing options compared to other major cities. Propertybuyer CEO Rich Harvey pointed out that approximately half of the suburbs in Southeast Queensland already have median prices above $1 million, and he predicts that this trend will continue as more people from interstate relocate to Brisbane.

RE Group senior economist Eleanor Creagh also expects Brisbane to cross the $1 million threshold in the coming months. Harvey further suggests that this growth is a result of Brisbane's lifestyle appeal, relatively more affordable housing compared to Sydney, and increased investor interest. With a predicted growth rate of 8-10% this year, it appears that Brisbane is on track to become the next major Australian city with a median house price above $1 million.

‍

Melbourne’s housing market: a shift in relative affordability

On the other hand, Melbourne's housing market is undergoing its own transformation, with the city now being 35.3% cheaper than Sydney and 13.6% cheaper than Brisbane, according to data from CoreLogic highlighted in the Australian Financial Review. Just five years ago, Melbourne was much more expensive compared to Sydney and Brisbane. At that time, Melbourne’s home values were 22.6% cheaper than Sydney’s but 35.6% more expensive than Brisbane’s.

Melbourne’s median house prices are also now 5.7% cheaper than those in Adelaide and Perth, marking a shift in the balance of housing affordability. This change could be an indication that the worst may be over for Melbourne’s housing market, as affordability becomes a more prominent factor for potential buyers.

The decline in Melbourne’s relative prices compared to the other capital cities over the past five years reflects broader shifts in housing demand and affordability across Australia. As the market stabilizes, Melbourne may continue to benefit from being more affordable, especially for first-time buyers or those looking to relocate from more expensive cities.

‍

The broader Australian housing landscape

Across Australia, the overall number of suburbs with median house prices above $1 million has been steadily rising. There are now 1,194 suburbs or towns with medians above this threshold, up from 1,144 in September 2024. This indicates a broader trend of rising prices across the country, driven by factors such as interstate migration, low housing supply, and strong demand for property.

As Australian cities experience varying levels of price growth, the overall trend suggests that more regions are becoming unaffordable for the average buyer. The increasing number of million-dollar suburbs reflects this shift and highlights the importance of affordability in shaping the future of Australia’s housing markets.

‍

Conclusion

Australia’s housing market is in a state of flux, with Brisbane nearing the milestone of becoming the second Australian city with a million-dollar median house price, while Melbourne has become relatively more affordable in comparison to Sydney and Brisbane. Factors such as interstate migration, lifestyle preferences, and affordability continue to play crucial roles in shaping property prices across the country. As demand and price growth persist, it will be interesting to see which cities emerge as the next hotspots for real estate investors and homebuyers alike.

References:

https://www.afr.com/property/residential/is-the-worst-over-for-melbourne-s-housing-market-20250210-p5lavn

Terry Ryder – Hotspotting

‍