Relative affordability drives Australian residential prices

Article

Relative affordability drives Australian residential prices

May 15, 2026 / By Abby Sage

Residential sale prices across most of Australia have seen growth over the past five years, with some markets reaching new records. The growth pattern, however, is not what you might expect. Locations with lower median sale prices have seen the most standout growth. With cost-of-living pressures on the rise, many buyers are being priced out of the blue-chip suburbs and moving towards more affordable markets.

The numbers tell a compelling story. In many cases, the lower the median price, the greater the scope for growth. Over the past five years, house prices have surged the most in markets where current medians are around $1,000,000. In Figure 1, the top left quadrant highlights Local Government Area’s (LGA’s) with the highest annual growth. Most of these have median prices between $1,000,000 and $1,500,000 are located in Adelaide, Perth and Southeast Queensland. Salisbury in Adelaide’s north achieved an impressive 16.5% annual growth in median house prices, reaching $758,000 in March 2026. Perth dominates, accounting for more than half of all LGAs reporting over 10% annual growth, while every LGA in Southeast Queensland exceeded 12%.

Figure 1: Median house sale price and 5-year annual growth by LGA, JLL Research, March 2026

Source: JLL Valorem

Sydney presents a more nuanced picture. Price levels and growth rates vary widely across the city. Premium areas like Mosman experienced just 4.3% annual growth, despite a median house price of $5,240,000. However, moving further west from the Sydney CBD, stronger growth becomes evident. Fairfield recorded 10.6% annual growth with a median house price of $1,310,000. In Sydney, the areas that achieved growth over 10% are in the central and outer west regions. Median prices in these areas are below $1,900,000, compared to above $2,250,000 in inner Sydney.

On average, Sydney house prices increased 8% per annum, while Melbourne lagged at 3.3%, with some areas seeing less than 1% annual growth over the five-year period. By comparison, Perth, Adelaide, and Southeast Queensland markets saw over 11% growth per year.

Figure 2 reveals that the same pattern holds in the apartment market across Southeast Queensland, Perth, and Adelaide. The more affordable the market, the higher the growth. Logan’s apartment prices rose by over 20% per annum to $590,000, while Armadale in Perth saw growth above 21%, reaching $522,000. Melbourne and Sydney, however, show more evenly distributed growth across different areas and median price levels. Notably, some inner Sydney LGA’s outperformed their outer LGA counterparts, with Randwick and Waverley achieving 5.7% and 5.5% annual growth, respectively. Apartments remain more affordable than houses, and buyers are increasingly compromising on size to stay in Sydney’s inner suburbs. This is driving stronger growth in these locations, supported by higher demand and often deeper budgets.

Figure 2: Median apartment sale price and 5-year annual growth by LGA, JLL Research, March 2026

Source: JLL Valorem

Relative affordability continues to drive price growth across Perth, Adelaide and Southeast Queensland, where median house prices average over $530,000 less than Sydney, at $1,505,000. As expensive markets become increasingly out of reach, lower-priced markets are likely to see the strongest demand. As long as budgets allow, prices in these areas will continue to rise.