Statistics released by PRD Nationwide show that 51% of Sydney suburbs now required a budget of over $1 million, closely followed by Melbourne at 40%.
Only 5.4% of suburbs in Sydney and 6% in Melbourne are within reach for buyers with a budget of $500,000 or less.
As the number of sales in both houses and units in Sydney decreased, vacancy rates sat at a low 1.7% over the December quarter.
The steady increase in Melbourne dwelling values has been strongly influenced by foreign buyers taking advantage of the low Australian dollar.
Current market conditions have sparked concerns that unaffordability could affect transaction volumes in the near future.
Australia’s other capital cities have also seen interesting developments over last year’s final quarter.
Adelaide has seen healthy growth with the median price surrounding the CBD raging within $500,000 - $800,000. Demand has increased over the last 12 months due to new infrastructure developments, such as the new laneways legislation.
Darwin’s property market has remained relatively stable throughout 2014. An increase in new housing supply has seen a high transaction growth the majority of suburbs. $626 million worth of new residential projects are set to commence in 2015.
Perth recorded strong growth in the luxury property market with waterfront properties demanding upwards of$1.5 million. Coastal areas held the highest median house price while the CBD lagged behind.
Brisbane remains one of Australia’s more affordable capital cities. With a budget of around $525,000 buyers can afford to purchase property in 26% - 42% of the cities suburbs. Second and third home buyers have been on the increase taking advantage of lower interest rates and increased equity in their homes.