Domain's housing affordability report compares suburbs across Australia by their average cost per square metre.

Paddington and Tamarama, both eastside Sydney suburbs, are the most expensive by this measure, at $25,755 and $25,684 per square metre (per sqm) respectively.

The top 10 suburbs are all in Sydney.

Of the top 66 most expensive, only Albert Park in Melbourne (26th overall, $13,915 per sqm) and Kent Town in Adelaide (65th overall, $8,937 per sqm) are outside of Sydney.

Capital cities by affordability

Darwin is currently the capital city where buyers will get the best value for land.

The Northern Territory capital has both the highest median land size (806 sqm) and the cheapest average price per sqm ($737).

Land in Darwin is 32% cheaper per sqm than Hobart, the second most affordable city ($1,087 per sqm).

It is also over three times cheaper than in Sydney, where a square metre costs on average $2,466.

In 2012, Perth had an average price per sqm of $897, the second most expensive in the country behind Sydney.

Since then though, modest property price growth has seen it fall behind Melbourne, Sydney and Canberra, despite block sizes shrinking by 16.2%.

Capital cities ranked.JPG

Buyer value shrinking in big cities

Demand for property in the larger capital cities (Sydney, Melbourne, Brisbane, Adelaide and Perth) has seen block sizes decrease by 13% in the last ten years.

While diminished block sizes helps to slow property price growth, price per sqm demonstrates buyers are getting less and less value.

"The land cost has not reduced - buyers are just purchasing less of it," said Dr Nicola Powell put it, Domain's head of research. 

"As a result, areas with the largest decreases in block size have had growth in price per sqm outpace house price growth at a faster rate, meaning that the true cost to buyers is growing faster than the median house price alone suggests.”

Takeaways for buyers

In the big cities, particularly Sydney, development is lagging behind an influx of new residents, which will likely see house prices continue to increase.

"Policy change, land release and property tax reform is needed to see a drastic change in price per sqm affordability," Dr Powell said.

She said that because of this urban density, buyers should be looking away from city centres for the best value per sqm, and that this would in turn help to ease the exorbitant costs in areas closer to central business districts.

"The city fringes offer a much cheaper price per sqm, and with more jobs moving to commercial hubs such as Parramatta and Macquarie Park, these outer areas will become more attractive due to the potential for lower workplace times." Dr Powell said.

"Having multi regional cities will help to distribute wealth across a larger area and provide equal access to education, healthcare and employment opportunities.

"This will also help to spread the cost per sqm to be less heavily centred in towards our CBDs."

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Filters
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
6.04% p.a.
6.06% p.a.
$3,011
Principal & Interest
Variable
$0
$530
90%
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5.99% p.a.
5.90% p.a.
$2,995
Principal & Interest
Variable
$0
$0
80%
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  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
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5.69% p.a.
6.16% p.a.
$2,899
Principal & Interest
Fixed
$0
$530
90%
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Flexibility to split your loan with both fixed and variable rates
 Disclosure
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

Picture by Jamie Davies on Unsplash



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