The six suburbs where it's cheaper to buy a house today than it was five years ago

Despite soaring interest rates and a cost-of-living crisis, there are just six suburbs in Australia where it is cheaper to buy a house today than it was in 2019.

Over the past five years house prices have generally been on an upward trajectory, despite a string of interest rate hikes from the Reserve Bank of Australia resulting in the highest cash rate in 12 years – 4.35 per cent. 

But new analysis by Domain shows there are only six suburbs – in Victoria and Western Australia – that have bucked the trend and become more affordable compared to 2019.

“What this highlights is the broad-based lift in overall values over the past five years,” says Domain chief of research and economics Dr Nicola Powell. “And it isn’t just one pocket of Australia that has seen that increase in price – it’s every corner of the country.

“The fact that we have house prices rising across almost all of the suburbs in five years and only have six suburbs that are more affordable than what they were in 2019 highlights the undersupply of stock in the housing market.”

Where it’s cheaper to buy a house today than in 2019

Box Hill in Melbourne’s inner east has a median house price of $1.2 million – a drop of 15.2 per cent in five years, and an even steeper decline of 19.9 per cent in the 12 months to July.

Offer Ends 2nd Dec $1,500,000-$1,600,000

15 Hannaslea Street, Box Hill VIC 3128

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Local agent Calvin Chan of CHN Real Estate Group says Box Hill’s property market was on a high in 2019 but has since shifted.

“Box Hill had a lot of development sites that were selling for very high prices five or so years ago; it was peak development market,” he says. “And interest rates were a lot lower at the time so properties were selling a lot higher then, too.”

Chan says some of the properties he sold five years ago are now going “for a lot less than what they were selling for in 2019”.

He adds that a decline in the number of properties coming to market in the suburb in the past year had contributed to a drop in the median house price.

“Box Hill isn’t a big suburb and in the past year, we had fewer houses being sold than in previous years,” he says. “Once a house is sold, it’s not going to be sold again for a very long time so we’ve seen a drop off in the number of houses coming to market lately.”

SOLD - $1,385,000

22 Holbrook Crescent, Brunswick West VIC 3055

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In Melbourne’s north, Brunswick West is another suburb where prices have retreated. It now has a median house price of $907,500, down 11.5 per cent in five years and 6 per cent year-on-year.

Local agent Jason Sharpe of Woodards says the “capacity to buy and renovate was significantly cheaper” in 2019 than it is now, which was driven by low interest rates that put upward pressure on house prices.

In June 2019, interest rates were at 1.25 per cent – 3.1 points lower than today.

“Our primary market consists of people moving out of North Fitzroy and North Carlton and into suburbs like Brunswick West and East – those inner-city suburbs,” Sharpe says. “They often move from a single-fronted home to a double-fronted one and undertake a significant renovation.

“Today, some of those top sales we’re achieving reflect the results of those renovations, or new house builds that were done only a few years ago. “

SOLD - $2,000,000

4 Harry Street, Brunswick West VIC 3055

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Not far from Brunswick West is the inner-city suburb of North Melbourne,  which has a median house price of $1.08 million, according to the latest Domain House Price Report. This is down 4.4 per cent over five years and 10 per cent year-on-year.

Sharpe says changes to the land tax on investment properties in the state have pushed many investors to offload property in the past year.

“A flow of investor stock is being sold off the back of changes to the tax rulings so there has been a slight downturn in pricing in the marketplace,” he adds. “There is a bit of uncertainty around interest rates at the moment so there will be a level of caution from both buyers and sellers in the coming months.”

Powell says the suburbs that had gone backwards in Melbourne will slowly head into a period of price recovery.

“One of the trends that has helped pull down prices is people leaving the city,” she says. “In some of these Melbourne suburbs in particular, what we could see is the perception of value that will be built there and I am certain that we will eventually see them move into positive growth.”

Offers from $729,000

123 Brede Street, Geraldton WA 6530

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In Western Australia, the costal town of Geraldton has seen house prices fall by 9.3 per cent over five years to $330,000, but grow 4.8 per cent year-on-year.

In Perth, East Perth’s median house price is down 4.1 per cent in five years to $540,000, but up 6.4 per cent year-on-year. In West Leederville, house prices fell by 3.4 per cent in five years to $855,000, and declined 10.9 per cent year-on-year.

Despite the poor house price performance over the five years from 2019, agents report seeing a shift in demand.  

“I think properties in East Perth and West Leederville have gone through the roof,” says Adrian Abel of Abel Property Sales. “I sold a townhouse in West Leederville 18 months ago for $960,000 and we’ve just sold it again for $1.28 million.

Under Offer

22 Constitution Street, East Perth WA 6004

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David Potiuch of Geralton Property Team says property in Geraldton is relatively cheap and prices have risen steadily over the years.

“The level of demand for houses in this suburb has been supporting and lifting property prices, and even then, properties are still very cheap compared to what you can get elsewhere in Australia,” he says. “So we have a range of local buyers and investors who are hoping to buy here.”

Powell says that, in 2019, property prices in Perth performed poorly, and now there are still suburbs that “have not reached a peak price”.

“We’ll likely see those prices lift in the next quarter,” she says.