The number of homes for sale under $600,000 in Australian cities hit a record low.
A report by PropTrack Market Insight Report found that the share of newly listed properties for sale on realestate.com.au for less than $600,000 was 35.8 per cent in October 2022.
This number has fallen sharply by 16.7 percentage points since the start of the pandemic (March 2020).
This comes despite significant declines in home prices in recent months as rising interest rates put pressure on the housing market.
Condominiums haven’t been hit as hard as homes, with a drop of just under 7 percentage points since the pandemic.
This points to a growing shift away from homeownership, said Cameron Kocher, director of economic research at PropTrack, where prices are pushing low-income earners out of the race.
“If anything,” he said, “it highlights that if you have a budget of less than $600,000, you have a much greater opportunity in the unit market.”
Finding affordable property varies greatly from city to city, Kocher said, with buyers in major capitals like Sydney, Melbourne and Canberra struggling to find properties listed for less than $600,000.
In regional areas, the decline was more significant, as “tree shifters” contributed to the skyrocketing real estate prices. The share of new listings under $600,000 has fallen since the onset of the pandemic, from 71.2 percent to 45.6 percent since the start of the pandemic.
Meanwhile, the volume of affordable listings in metropolises has fallen from 42.5 percent to just 30.6 percent since March 2020.
“A lot of people moved to the area, and these areas were where you could get real estate that was much more affordable than in the capitals,” Kocher said.
“Overall, it shows it’s getting tougher across the country.”
Less than one in five new listings was under $600,000 in October for the Gold Coast in Queensland and Geelong in Victoria.
This share drops to one in 10 in the Illawarra region of New South Wales.
With real estate prices continuing their downward trend, Kocher says there is potential for light at the end of the tunnel.
“If you look at Sydney, there was a slight uptick between last year and this year in the share of listings under $600,000,” he said.
It appears that falling real estate prices are happening mostly in the higher end of the market, which doesn’t have much impact on the share of affordable homes.
“I think in 12 months, with the expectation that prices will come down, we could see that drop even more,” he said.
“But I think that trend is very strong and the next time we see prices go up, we’re going to see that share of affordable homes shrink.”
Originally published as Affordable real estate hits record low in October