Just 501 suburbs left for buyers under $500k as affordability crisis deepens

There are now just 501 Aussie suburbs where buyers can purchase an average house for under $500,000 – down from 658 a year ago and 1753 in 2020.

To put that figure into perspective, there are 6689 house suburbs across the nation.

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

It comes as the latest PropTrack Home Price Index revealed that national home prices hit a new record high in November, increasing 0.5 per cent to sit 8.7 per cent higher compared to 12 months ago.

REA Group senior economist Eleanor Creagh said even with a pullback in the pace of growth last month, home prices were still growing at a solid pace.

“We’ve seen home prices continue to rise at a brisk pace, with some easing in the monthly pace of growth in markets that are seeing a large uplift in stock for sale in November,” she said.

“This year’s series of interest rate cuts have boosted borrowing capacities and improved sentiment, driving renewed momentum in the housing market. “Continued population growth, increased investor and upgrader activity, and of course, the expanded home guarantee scheme, are also bolstering demand.” Melbourne and Sydney’s median home prices grew at a slightly slower pace in November compared to previous months, up 0.2 per cent and 0.4 per cent respectively.

This followed a 29.5 per cent month-on-month surge in new property listings in Melbourne in October, and a 20.1 per cent jump in Sydney new property listings. Adelaide had the strongest month-on-month home price growth in the country in November, up 0.9 per cent for the month.

Perth followed Adelaide with the second strongest home price growth in Australia in November, with the city’s median home price gaining 0.89 per cent during the month.

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

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

Australia’s combined regional property markets outperformed the capital cities last month, up 0.6 per cent and 0.48 per cent, respectively.

The Market Trends report shows there are now just 109 house suburbs with a median price of $500,000 or less in NSW, with the cheapest homes located in the Far West and Orana region.

In NSW, the cheapest place to buy a house is Brewarrina, where the average home sells for $104,000. South Australia now has just 65 house suburbs under $500,000, ranging from the outback town of Andamooka ($65,000) to Hamley Bridge in the Barossa-Yorke-Mid North region ($500,000).

Victoria has 95 house suburbs under $500,000, none in the Greater Melbourne region.

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

The Northern Territory has 20 suburbs with a median house price below $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 listings under $500,000, good luck.

Queensland has 118 suburbs with a median house price at or below $500,000, ranging from $67,500 in Dirranbandi to $500,000 in Goondiwindi, Sun Valley, Innisfail Estate, Oakey, Cullinane and Maryborough. Just three Brisbane suburbs make the cut, none of them on the mainland – Russell Island ($445,000), Lamb Island ($457,500) and Macleay Island ($495,000).

There are 39 suburbs under the $500,000 threshhold 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).

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

Norseman recorded the highest growth in median house values in the 12 months to November, rising a staggering 121 per cent.

Seven suburbs, including Norseman, with median house values at or below $500,000 recorded value increases north of 50 per cent in the past 12 months – Millchester (Qld), Wilmington (SA), Springsure (Qld), Merredin (WA), Tarpeena (SA) and Riverton (SA).

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

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

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

“For many first-home buyers, particularly in cities like Brisbane, Perth, and Darwin where property prices have surged over the past year and rents remain high, the biggest challenge remains saving a deposit while managing everyday living costs,” she said.

“Schemes like the First Home Buyers Guarantee have certainly helped ease the deposit hurdle for some, allowing eligible buyers to enter the market with as little as 5 per cent saved.”

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

“Even when buyers can access support to get in the door, tighter lending assessments continue to hold a lot of people back, especially those without family support or with variable incomes,” she said.

“So while repayments might look more manageable, home ownership still feels just out of reach for many would-be buyers.”

Canstar’s 9th annual Consumer Pulse Report has also revealed that the cost of housing is the number one concern for Aussies in 2026.

The report, which is based on the opinions of more than 2,000 Australians, found 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.