Believe it or not, half a million dollars is still enough to secure a foothold in some of Australia’s most exclusive neighborhoods – if you know exactly where to look.
With the Reserve Bank’s latest rate cut move boosting borrowing power and confidence in the market, brokers are now better positioned to help clients discover surprisingly affordable homes in prestigious suburbs.
These hidden gems, revealed by PropTrack’s detailed analysis of property values, offer first-time home buyers homes at prices well within reach in upscale suburbs like Hunters Hill, New Farm, and Toorak.
A detailed study by PropTrack, which recently reported a slowdown in home prices throughout 2024 causing several suburbs to drop out of the million-dollar club, has segmented suburbs into SA1 regions – small neighborhoods consisting of just a few streets – to identify where the most significant savings can be found.
In these areas, homes may cost as little as half – or even just 10% – of what properties fetch in the suburb’s most expensive sectors.
Eleanor Creagh (pictured), senior economist at PropTrack, said that the stark price discrepancies within the same suburb make it feasible for those on tighter budgets to buy into premium locations, albeit with some compromises.
“Even in the priciest suburbs, there are pockets where property prices are significantly lower,” Creagh said. “Buyers with a constrained budget can still purchase in a pricey or prestigious suburb by compromising on property size, proximity to premium amenities, and view or location within the suburb.”
The potential savings are enormous, with some buyers able to save hundreds of thousands – or even millions – of dollars by opting for homes in the most affordable areas of a suburb rather than its most costly districts.
For example, Hunters Hill, a wealthy waterfront suburb in Sydney’s lower north shore, showcases units valued at around $562,000 in its more economical areas – far less than the nearly $1 million median unit value found in other parts of the suburb.
Factors influencing the lower property prices in certain parts of a suburb include smaller lot sizes, older homes, and higher population density. Less desirable features like proximity to busy roads or industrial areas also reduce property prices, offering savings for those willing to make certain trade-offs.
Conversely, areas that offer large homes on expansive lots, close to key amenities like shopping centers and natural beauty spots, command higher property prices, PropTrack reported.
“Properties with panoramic views of the ocean or rivers are especially desirable, often seeing significant price increases,” said Alexander Phillips, a real estate agent at PPD Real Estate.
The disparity between affordable and premium pockets within the same suburb provides a unique opportunity for buyers.
Those who understand where these discrepancies lie can significantly benefit from what might be the last affordable entries into high-demand markets, especially as property prices are expected to climb with falling interest rates.
Recent data from PropTrack showed that before the decrease in interest rates, 30 suburbs had already escalated into the $2 million range, while an additional 14 reached the $3 million threshold.
