Finance Property City living under $400k? You’re dreaming

City living under $400k? You’re dreaming

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The number of capital city homes selling for under $400,000 has plunged in the last decade to fewer than three-in-ten.

Hobart is the only city where the majority of houses still sell for less than $400,000, while Canberra has the fewest homes under that price tag, at just 7.5 per cent.

Ten years ago, more than two-thirds of capital city homes were selling for less than $400,000.  

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In Sydney, Australia’s most expensive city, just 14 per cent of houses and 24 per cent of apartments are selling for less than $400,000.

RP Data senior research analyst Cameron Kusher said a unit development boost in Melbourne and Sydney had not made it much easier for first home buyers.

“Units are typically much more affordable than houses but even still the proportion of units selling below $400,000 is quite low,” he said.

“I think over the coming years we will see a decline in home ownership rates, purely because the cost of owning a home is quite high.”

Mr Kusher said those capital city homes under $400,000 were usually in the outer suburbs, which are not always popular with first home buyers due to long commutes to work.

RP data’s home value index shows prices across the capital cities grew by more than 20 per cent in the past five years.

Affordability is much better in regional areas, where 64 per cent of homes are selling for less than $400,000.

That is down from 86 per cent a decade ago.

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