What $1 Million Buys in Australia’s Housing Market Today

The question of what $1 million buys in Australia’s housing market is now more interesting than ever before. With property values surging dramatically over the past decade, the traditional benchmarks for what constitutes a “million-dollar home” have shifted significantly. Growing up, being a “millionaire” was something people only dreamed about. Today, many family homes already exceed this figure.

While there are no indicators this surge in pricing is going to ease, understanding precisely how far your budget stretches in today’s market is essential. Whether you’re a first-time buyer, seasoned investor, or simply curious about the state of real estate, it’s important to know what your dollar buys in today’s market.

And yes, this article will be incredibly amusing for your children, or grand children to read when they are your age some day.

 

Australia’s Million-Dollar Market: The New Norm?

According to recent CoreLogic data, over 34% of Australian homes are now valued at $1 million or higher.

It’s incredible to think that ten years ago, this figure was below 10%. In capital cities alone, nearly half of all homes have crossed this once-prestigious threshold. Clearly, a million-dollar home isn’t as luxurious or spacious as we once made it out to be.

Sydney is a prime example, with approximately 64% of homes priced over $1 million! That’s a lot.

Ten years ago, a million dollars in Sydney would have comfortably secured you a spacious family home near desirable areas. Today however, it might only cover a small apartment or townhouse located much further away from the city.

And if you want to look at how outrageous pricing can be, check out this recent sale from Bondi Beach where a studio apartment went for over $800,000!

But this trend isn’t limited to Sydney.

Brisbane has risen dramatically, from only 3% of homes valued at $1 million ten years ago, to around 40% today. Melbourne and Adelaide have followed similar paths, albeit slightly slower, significantly reshaping affordability and buyer expectations.

When not so long ago $1m seemed like a magic number, today it might not even get a roof over your family’s head in the place you really want to live.

 

Regional Markets: Are They Immune?

Regional Australia, while generally more affordable, isn’t escaping this trend either.

Western Australia and South Australia have seen strong regional growth recently too and this means even these areas now host million-dollar properties in significant numbers. Despite the relative affordability compared to major cities, high-demand regional hotspots have significantly appreciated.

It’s only speculation of course, though experts agree that the global pandemic helped fuel this shift away from cities as people learned how to work remotely and choose lifestyle over convenience to the office.

However, there are still plenty of locations where $1m can buy the “great Australian dream”. Cities like Darwin and Hobart still offer more accessible prices, with far fewer homes breaking the million-dollar barrier.

This “as new” family home near Hobart recently got snapped up for $860,000

 

Or you can get jaw-dropping water views like this for $950,000

 

Sure, these markets can provide greater affordability, but their economic drivers differ substantially from cities like Sydney or Brisbane and so do their investment prospects.

 

What’s Behind the Surge?

It’s clear there are several factors that are contributing to these rising home values around the country. Generally speaking, property values are simply a function of supply and demand. As Australia’s population grows, if the number of new dwellings in desirable areas is unable to keep pace, prices get higher simply because people have to pay more against stiffer buying competition.

The rebound in Australia’s population growth, fuelled by a post-pandemic surge in net overseas migration, continues to place pressure on limited housing stock. More people chasing fewer homes naturally pushes prices upward, maintaining the $1 million benchmark as a reality for an increasing portion of the market.

If construction of new housing is unable to keep pace with population growth, prices are going to rise.

Then there’s interest rates. Interest rate cuts in early 2025 have significantly boosted buyer confidence and increased borrowing capacity. That should get more people into property, right? Well, not quite. Lower interest rates have also intensified competition. More people are coming to the market with increased borrowing capacity. If you give everyone in the market for a new property access to more funds via borrowing, all that’s going to do is drive up market prices.

 

How This Affects You as a Buyer or Investor

As lending advisers, we often help clients grapple with the implications of these price rises. You need to remember that it’s not just about what $1 million buys in Australia’s housing market. You need to keep your eyes on your long term financial goals and understand how your borrowing strategy needs to evolve in response.

If you are looking for a property and are wondering if you can afford in that area, there’s two things you need to do:

1. Understand your borrowing capacity and run your numbers on repayments to make sure you can pay your mortgage
2. Know what property is worth in the area you are looking to buy

Most people stumble at either or both of these hurdles and end up guessing, or worse still, overextending themselves in the process.

All you need to do is have a conversation with your lending adviser to understand your borrowing capacity and to know what property is worth? Don’t guess! Just look on websites like RealEstate.com.au and search the areas you are looking to buy. Add filters for the amount you have to spend and what has sold in the last 6 months and the website will show exactly what you have needed to pay for property and the types of properties available.

RealEstate.com.au has filters to search by sold price, as well as the date it sold

 

If you can’t find something in the area you are looking to buy that has sold for your budget in the last 6 months, the chances are it doesn’t exist.

If you’re a homebuyer in a major city, your million-dollar budget might secure something smaller or further away from central amenities. You just have to expand your search area.

For investors, the question shifts toward rental yields versus potential capital growth. Buying a more expensive property might mean lower yields initially, but possibly greater long-term gains if capital appreciation continues.

The key is understanding precisely what your budget achieves in different locations. For instance, $1 million might buy a spacious family home in outer suburbs or regional areas, but perhaps only an apartment in blue-chip areas close to the CBD. Your personal or investment goals should guide these decisions.

 

Strategic Moves in a High-Value Market

To navigate the reality of a million-dollar property market, you need to be strategic:

• Look beyond headline suburbs. Areas slightly off the radar can offer better value and still have significant growth potential. If you are purchasing your family home, you need to be realistic as to where you can afford. If you start looking with an unrealistic budget, chances are your pre-approval will lapse, or worse still, you’ll find yourself in heated family arguments out of frustration.
• Consider your long-term needs and risk tolerance. Stretching your budget to the limit may not always be wise, even if borrowing capacity allows it. We always suggest to clients to keep some cash on hand to ride out any market and financial uncertainties.
• Work closely with lending specialists who can tailor a loan structure specifically for your circumstances. The cheapest rate isn’t always the smartest financial strategy. Outstanding lending advisers know the difference.

 

Expert Advice Makes the Difference

With significant sums on the line, getting professional guidance is essential. You need to match with a lending adviser who understands you, your goals and your profession. The Indigo Finance team specialise in understanding not just the property market, but also how each client’s individual financial situation aligns with their property goals. It’s about making informed, intelligent decisions. Especially in a market where a million dollars doesn’t buy as much as it once did.

Ready to explore your options or want to understand precisely what your million-dollar budget can achieve?

Contact us directly and let’s start the conversation today.