Outer suburbs outpace inner cities as rising costs push buyers outward
Australia’s outer suburbs have posted stronger house price growth than inner-city areas over the past year, according to fresh data from property analytics firm Cotality.
The firm’s latest chart pack highlights that lower-priced homes — mainly found on city fringes — have driven the highest capital gains across major cities, as affordability pressures and tighter lending rules push buyers further out.
Tim Lawless (pictured above), research director at Cotality, said demand has shifted decisively towards the outer rings of capital cities, where homes are still within reach for many households.
“Households are making pragmatic decisions in response to tighter borrowing capacity and higher mortgage costs,” Lawless said. “That’s pushed demand towards the lower quartile of the market, and it’s across the outer suburbs that this value-driven demand is translating into the strongest growth.”
In Sydney, every one of the top 20 suburbs for annual price growth was located more than 20 kilometres (km) from the central business district (CBD). Suburbs in the Fairfield, Liverpool and Blacktown local government areas dominated the list. Overall, 81% of suburbs located 20km or more from the city centre saw prices rise, compared to just 26% of inner areas.
Melbourne followed suit, though with more subdued gains. About 38% of outer suburbs — those 20km or more from the city — recorded annual growth, led by areas like Hume, Frankston and Casey. In contrast, only 4% of suburbs within 5km of the CBD saw prices increase.
Growth was more widespread in Brisbane, where only a small share of suburbs recorded value declines. Prices rose 14% in the lower quartile over the past year, compared with 4.8% in the upper quartile. Of the top 20 growth suburbs, 17 were more than 20km from the city, with Ipswich accounting for over half.
Adelaide’s market saw a 9.8% annual rise in dwelling values, with all suburbs posting gains. Properties in the lower quartile led the way, up 15.2%, compared to a 7.3% lift in higher-end homes. Northern suburbs saw the highest growth, especially in Playford and Gawler councils.
In Perth, growth in the lower end of the market more than doubled that of the upper quartile — 15.4% versus 7.7%. Most of the strongest-performing suburbs were outside the inner ring, with Swan and Mundaring councils making up a large share of the top 20.
Lawless said the figures reflect a longer-term affordability shift, noting that typical earnings no longer stretch to cover the cost of a median-priced home.
“In theory, a household on a median income, with a 20% deposit, would need to dedicate just over half of their gross income to afford a median-priced home,” he said. “In practice, that’s pushing buyers further out, where homes remain comparatively affordable. The result is that we’re seeing outer suburban markets do much of the heavy lifting in terms of price growth.”
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