Australian Property Prices Surge: Sydney Tops as Most Expensive City, Domain Report Reveals

Domain’s recent Price Square Metre report shows a rising trend in house and unit prices per square metre across Australian capital cities over the last year and five years, driven by increased prices and shrinking property sizes.

Sydney leads as the most expensive city, with house prices reaching $2,590 per square metre, a 5.1% increase from last year and a 49.5% rise over five years.

However, in Sydney’s priciest suburbs, such as Paddington and Darlinghurst, these prices soar to $27,440 and $25,065 per square metre, respectively.

Melbourne follows as the second most expensive city, with a square metre cost of $1,838 for houses, marking a slight 0.8% annual increase and a 32.8% rise over five years.

Other cities like Canberra, Perth, Brisbane, Adelaide, Hobart, and Darwin also show varying levels of price per square metre, with Canberra at $1,485 and Darwin at the lower end at $802.

For units, Sydney and Melbourne are once again the most costly, priced at $8,510 and $7,333 per square metre, respectively.

Domain’s chief of research and economics, Dr Nicola Powell, said Australia was home to some of the least densely populated cities in the world but still had some of the most expensive property markets.

“Despite this, the desire of people to live in the capital cities has meant that more are trying to squeeze into them and are competing for housing,” she said.

The report said that Sydney’s high population and costly housing market reflect its attractiveness, driven by career opportunities, educational facilities, lifestyle, climate, and beach proximity.

This, in turn, has led to a significant decline in housing affordability with a widening price per sqm gap between Sydney and other cities like Melbourne and Canberra (see image).

A decade ago, Sydney was 22% more expensive than Melbourne and 129% more than Hobart (the then most affordable city). Today, this gap has increased to 41% with Melbourne and a staggering 264% with Darwin, the most affordable capital city now.

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