While the median property value provides a useful reference point for the ‘typical’ home value in an area, buyers on a tight budget might find it more practical to narrow down their property search by examining lower quartile values. It’s important to remember the median represents the middle point of the market; half the properties in a region will have a value that is lower than the median and half will have a value higher than the median. The lower quartile (or the most affordable 25% or properties in a region) provides a better view of the market entry point, while the upper quartile (most expensive 25% of properties) gives an indication about premium values.
With this in mind, some areas that might seem out of budget based on the median value may actually offer up some opportunities if buyers are willing to target properties at the lower end of the value range. Similarly, buyers on a tight budget that are hoping to buy into a highly desirable region may be able to achieve their aspirations by targeting the lower end of the market. This might mean looking for the worst house in the best street, buying a home on a smaller block of land, or choosing a property that needs some work.
Sydney Australia’s most expensive housing market has a median house value of $994,300. However the lower quartile house value, at $697,370, provides an entry point to the market that is almost $300,000 lower than the median. In some cases, such as the North Sydney & Hornsby sub-region or the Eastern Suburbs, the difference between the median and lower quartile can be more than half a million dollars. Across Sydney’s sub-regions, there are three areas with a lower quartile house value below $600,000. These are the Central Coast ($525,590), Outer South West ($564,730) and Outer West & Blue Mountains ($575,890). Additionally, Sydney has the largest inter-quartile range (the difference between the upper and lower quartile) with the upper quartile 126% higher than the lower quartile, implying a significant level of diversity in housing values across the city.
Melbourne With a city-wide median house value of $798,670, Melbourne is Australia’s second most expensive capital city housing market (after Sydney). The lower quartile value for Melbourne houses, at $614,330, is $184,300 lower than the median. This provided an easier entry point for budget-constrained buyers. Three sub-regions of Melbourne have a lower quartile house value that is greater than one million dollars (Inner, Inner East and Inner South), and four regions have a lower quartile house value below $600,000: North West ($549,790), South East ($573,590), West ($524,820) and Mornington Peninsula ($580,130).
Brisbane The lower quartile for Brisbane houses is $408,510. This is 25%, or $139,000 lower, than the median value for the city. The majority of Brisbane’s sub-regions show a lower quartile house value that is well below $500,000. Even Brisbane’s most expensive sub-region has a lower quartile value that is well below $900,000 which is $173,530 below the median.
Adelaide At $366,220, the lower quartile house value in Adelaide is the second lowest amongst the capital cities (after Perth). Buyers targeting lower quartile properties could be spending about $108,000 less than the city-wide median. Each of Adelaide’s sub-regions has a relatively low entry point, with even the most expensive sub-region (Central and Hills) recording a lower quartile value that is well below $600,000.
Perth With Perth housing values now stabilising following a five and half year downturn, housing values are amongst the most affordable of the capital cities. With a lower quartile house value of $358,790, buyers targeting the lower end of the market could be spending around $98,000 less than the median. Every sub-region of Perth shows a lower quartile value under $400,000, except the Inner sub-region where the lower quartile value is $906,900. This is more than double the lower quartile values of any other region.
Hobart has seen a substantial rise in housing values over the past five years. As a result, housing affordability is more challenging. Buying a house within the lower quartile range ($394,850) could save a buyer around $118,000 compared with purchasing a house at median value.
Darwin housing values have been in decline since mid-2014, providing a substantial improvement to housing affordability. The lower quartile for Darwin is tracking at $388,720 which is roughly $82,000 below the median and the third lowest entry point across the capital cities.
Canberra The lower quartile house value for Canberra is the third highest amongst the capitals (after Sydney and Melbourne), recorded at $586,580. This is approximately $115,000 lower than the median house value.