Why Australian property is among the world’s most expensive, and what’s driving it

Across several credible benchmarks, Australia stands out as one of the world’s most expensive places to buy a home.

One recent global comparison of 60 countries put Australia in sixth place for the price of a ‘typical’ apartment purchase cost per 100sqm, ranking behind Norway, Austria, Luxembourg, South Korea, and most expensive, Switzerland. This result certainly underscores just how expensive Australian housing has become on the world stage.

But data compiled for a BestBrokers report into global real estate finance and property costs found that when it came to factoring in real wealth, Australians might be actually better off than it first appears.

When we discuss affordability, we need to look at the price of Australian property alongside average weekly wages.

According to the Australian Bureau of Statistics (ABS), average weekly earnings for full-time adults sat at $2,010 in May 2025. Meanwhile the mean dwelling price across Australia reached about $1 million in the March quarter of 2025 (with big differences when comparing between states and territories). That gap—between what a typical full-time worker earns and what a typical home costs—explains why our property market consistently screens as “expensive,” especially in the biggest cities.

Why is Australian property among the world’s most expensive?

High land values are where Australians want to live

We are one of the world’s most urbanised nations, with a heavy concentration along the east coast and the population is even denser in a handful of coastal cities.

Harbourfronts, beaches and Australia’s natural topography create both amenity and natural supply constraints, which our planning overlays reinforce and create amplified land prices in the well-located suburbs.

We are a popular place to live for migrants

Australia’s persistent population growth, driven by migration has increased demand for property and pushed property prices further on an upward trajectory.

Construction bottlenecks and costs

The National Housing Finance and Investment Corporation (NHFIC) has warned there is shortfall in supply of new dwellings because of capacity constraints (materials, labour) and the time it takes to convert zoned land into completed homes.

In practice, this means even strong pipelines can fall short, and supply lies well below the population-led demand.

Tax and financing settings

For domestic investors, interest deductions against rental income (negative gearing) and the capital gains tax discount have long shaped incentives.

Foreign investors love buying our property because even though they currently face tighter rules. Among those conditions are a temporary ban on buying established dwellings and higher application fees.

With avenues focused on new/off-the-plan stock, the policy mix still channels capital into the markets over long periods, especially when credit is plentiful.

Our markets also are recognised among the world’s most transparent real estate markets, a feature that encourages global capital participation and reduces the risk for foreign investors.

How we stack up internationally

The two key variables of the housing affordability global comparison are the average full-time weekly earnings of $2,010 and a mean dwelling price near $1.0 million.

Even allowing for dual-income households and historically low unemployment, we are hypersensitive to interest-rate cycles. This also pushes many first home buyers towards units, townhouses or outer-metro locations.

It also forces tricky trade-offs between commuting time, access to amenities and property size.

Why global investors favour Australian property

Despite higher entry prices, Australia ticks a lot of the boxes for international investors:

• Economic and policy stability - Australia has a strong and mature banking system alongside strong laws and policies governing our economic sector.
• Lifestyle and liveability - Sydney, Melbourne, Adelaide, and Perth consistently rank near the top of global liveability indices, which supports steady demand for both owner-occupier and rental housing.
• Population growth - Australia is popular for international migration and we have a constant inflow of students and temporary workers creating a tight rental market, particularly in inner-city and middle-ring unit precincts.
• Strong yields - While Sydney’s house yields are slim, apartment yields in other capitals can be very favourable. Regional centres can provide great yield and cashflow for foreign investors.
• Scalable markets - The revival of Brisbane and Perth has reminded investors that Australia is not a one-city story; diversified exposure across cities and product types can spread risk.

Where are the most expensive homes (and why)?

It is important to realise, that the lack of affordable properties is not spread evenly across the country.

Sydney remains the nation’s most expensive market, while Darwin continues to rein as the cheapest.

In Q3, 2025, median dwelling values were around $1.16 million in Sydney, roughly $922,000 in Melbourne, $900,000 in Canberra, $898,000 in Brisbane, $804,000 in Adelaide, $791,000 in Hobart, $774,000 in Perth and $519,000 in Darwin (noting these values move monthly, but the ranking across capitals usually remains consistent).

The county’s priciest properties are concentrated in prestige, amenity-rich enclaves with natural constraints on new supply.

The most expensive property markets are in Sydney’s eastern suburbs and harbourfront (Point Piper, Vaucluse, Bellevue Hill), the Lower North Shore and select Northern Beaches, plus Melbourne’s Toorak and Brisbane’s inner-east riverfront.

These suburbs can host the country’s wealthiest due to the combination of blue-chip school catchments, scarce land, protected view corridors, and a deep buyer pool, both local and international.

These properties offer a lifestyle amongst the rich and famous alongside their priceless Harbour Bridge, Opera House, or water views and beach access. There is limited supply of properties in this area, and everybody wants to buy here globally.

At the extreme luxury level, Knight Frank’s 2025 Wealth Report revealed that US$1 million buys just 45sqm of prime property in Sydney, compared with 87sqm in Melbourne and over 100sqm in Perth and Brisbane.

Internationally, that same US$1 million buys 19sqm in Monaco, 22sqm in Hong Kong and 32sqm in Singapore.

Where are the cheapest homes (and why)?

At the other end of the spectrum, affordability is concentrated on the smaller capitals and the growing regional towns.

Darwin’s property market sits in a very different position compared to Sydney, Melbourne or Brisbane and consistently posts the lowest capital city median values, which reflects its smaller economy, lack of job opportunities, climate, socio-economic status, and its large share of lower-density homes. PropTrack and other trackers have repeatedly flagged Darwin’s median around the low-to-mid $500,000s across 2024–25.

Darwin’s smaller population (approx. 150,000 in the urban area) means smaller buyer pool and less competition translating to lower property prices.

Darwin’s economy is also quite volatile because it is heavily linked to defence, government services, mining and infrastructure projects. A lot of the people living in Darwin are not permanent residents, but are fly-in fly-out workers (FIFO). The limited employment opportunities, reduces the demand for permanent migration.

For investors, while the rental yields can look attractive in Darwin, the capital growth has historically been very weak and more volatile.

If you’re looking for an affordable investment property, what you can learn from Darwin’s historical property price movements is to look for cheaper properties that have all the investment grade markers, that Darwin does not.

If buying rurally, look for jobs growth and good job opportunities, a comfortable climate, an economy that doesn’t rely on limited industries, and of course a growing population.

Will Australia always be ‘top-six expensive’?

Nothing in housing is permanent, but several forces are hard to unwind.

The concentration of coastal demand, planning frictions, construction constraints and continued international migration means Australia is likely to remain expensive when comparing property prices on a global scale.

Australia’s property markets are expensive because our most desirable land is scarce and heavily bid for, our population keeps growing, and our lifestyle is enviable.

We have strict planning and construction laws, and supply is struggling to keep up with the demand.

In the foreseeable future, there are no indicators that Australia’s property markets are going to crash or become more affordable when comparing wage-price growth. This is why Australia is so attractive for international investment.