Buying property on a $650,000 budget: where value still exists

It’s a little bizarre to think that $650,000 is regarded as a small budget when it comes to buying property in Australia but that’s the new reality.

That sort of money is hardly chicken feed.

Based on 2025 data, it would take an Australian with an average income and average expenditure more than 40 years to save $650,000 (assuming they save at the national average savings rate and do not invest the money). 

Even if our Joe or Jane Average aggressively saved 20 per cent of their income—considered a standard "good" savings rate—the timeline only reduces to approximately 25–30 years (depending on taxes and other variables). 

But that $650,000 mark is now seen as an entry-level, or ‘affordable’, property purchase.

Not only have property prices powered along at close to double the pace of inflation and wage growth in the past few years, but it’s the affordable end of town that has seen the fastest pace of property price growth.

Two years ago, $500,000 was seen as the benchmark for an affordable property purchase. You can now add two average after-tax annual incomes ($70,000–$75,000) to that figure if you want to buy a habitable home in a capital city suburb.

Affordable investment specialist Joshua Meli, co-founder of CH Secure, said there were some golden rules that buyers in this price segment should focus on, and areas that presented value and others best avoided.

“In this price range, we see the strongest medium-term capital growth potential in affordability-led markets with strong underlying fundamentals, particularly where population growth, employment, infrastructure investment and lifestyle appeal intersect.

“Buyers should focus on outer areas of major capitals where houses or land-backed dwellings remain attainable and owner-occupier demand is increasing.

“Examples include Melbourne’s south and south-east (including Frankston), Perth’s southern metro (Kwinana precinct), and Adelaide’s southern metro through the Onkaparinga region, where affordability, employment nodes, transport links, healthcare infrastructure and improving amenity continue to underpin demand.”

If buyers were looking outside the big cities, he recommended regional cities with meaningful population sizes and GDP, supported by diverse employment bases and lifestyle appeal.

“These markets tend to provide stronger liquidity and resilience than smaller regional towns.
“Examples include Geelong and Ballarat in Victoria, and parts of Tasmania’s larger regional centres, depending on suburb and property quality,” Mr Meli told API Magazine.

Victoria a budget buyer’s destination

Victoria’s property market has stagnated for a decade and now sits below the other mainland capitals (outside Darwin) when it comes to median dwelling values.

With that improvement in affordability, Melbourne and the state more generally present some of the best options for property buyers on a $650,000 or lower budget.

Laura Scott, Principal licensee – Melbourne, aussieproperty.com, said outer suburbs with strong infrastructure rollout (train links, highways, schools, jobs) like Werribee, Tarneit, Wyndham Vale, Melton, Cranbourne have been popular with first-home buyers and investors because land scarcity and population growth often underpin value uplift.

“Outer suburban houses offer larger land parcels — traditionally a key driver of long-term value in Australian markets — though the timing and degree of growth can vary depending on supply and infrastructure delivery.”

There were also some areas and property types that could spell trouble for unwary buyers looking to stretch their dollar.

“Some new apartment developments in Melbourne CBD, Southbank, Footscray and other high-density planned areas have high stock and slower sales/rental uptake, which can drag on short-term capital performance and rental returns.

Very fringe estates that lack infrastructure such as good transport links, schooling, jobs or amenity can experience slower growth and price stagnation despite initial affordability.

“This is particularly true in portions of the outer fringe where supply outpaces demand,” Ms Scott said.

South Australia on a shoestring

Despite its strong growth mirroring that of Brisbane and Perth in recent years, South Australia was another state that still offered palatable options for those on a limited budget.

Peter Koulizos, Lecturer – Master of Property at The University of Adelaide, said property prices and rents in the more affordable areas of Adelaide are increasing at a faster rate than the more expensive sections of the market.

“This is because there is more demand for the more affordable properties as they are more attainable by a greater portion of the population.”

He said investors should seriously consider Ardrossan on the Yorke Peninsula.

“Rex Minerals are opening a copper mine within the next two years 10 kilometres from Ardrossan, and the influx of personnel into the area will put upwards pressure on property prices and rents,” Mr Koulizos told API Magazine.

Most cities are continuing to see homes at the lower end of the value spectrum supporting growth, especially for houses.

Across the combined capitals, lower quartile house values were up 1.3 per cent in January compared with a 0.3 per cent rise across the upper quartile.

This trend of stronger growth conditions at lower price points was seeing a broader range of buyer profiles competing in this budget space, according to REA Group Senior Economic Analyst, Megan Lieu.

“With housing affordability close to record lows and a potential interest rate rise on the horizon, the price of a home is playing an increasingly decisive role in where buyers choose to purchase.

“This is reflected in regions such as Townsville, Darling Downs–Maranoa and Mackay–Isaac–Whitsunday, which tend to have lower median dwelling prices and have consistently ranked among the top performing areas throughout 2025.

“Location is, and will continue to be, a key consideration for those looking to buy, however, the cost of homes in prime locations is often pricier and is becoming less attainable, prompting varied buyer types to consider alternative areas,” Ms Lieu told API Magazine.

For those on a budget, there are still plenty of buying options available—but perhaps steer clear of Sydney.