Key takeaways:
Affordable unit suburbs are increasing across Sydney, Brisbane and Melbourne, potentially giving more buyers a pathway into the property market.
Buyer expectations are changing as more Australians consider units and townhouses instead of detached houses to improve affordability.
Lower purchase prices may reduce the deposit and loan size needed, depending on the property and individual circumstances.
Affordability remains challenging, with many buyers balancing location, property type and lifestyle to find an option that fits their budget.
For many Australians searching for their first home, the biggest question is becoming not just when to buy, but what to buy.
As affordability pressures reshape the market, more buyers are widening their search beyond detached houses and considering units or townhouses as a way to enter the property market.
The PRD Smart Moves: Capital Cities Edition 1st Half 2026 report, released today, suggests more affordable suburbs are emerging across several capital cities, particularly for units. Rather than indicating homes are becoming cheaper overall, however, the findings point to buyers adjusting their expectations about what and where they purchase.
For borrowers, that shift could open new pathways into the market, provided they're prepared to weigh up different property types, locations and borrowing scenarios.
Why more buyers are looking beyond houses
According to the report, the number of lower-priced unit suburbs has increased across Sydney, Brisbane and Melbourne.
City | Affordable unit suburbs | What it may mean for buyers |
|---|---|---|
Brisbane | 66.7% | Buyers may have more lower-priced unit options than houses, although new stock is often concentrated in higher-priced suburbs. |
Sydney | 50.6% | Around half of unit suburbs are priced below the Sydney metro median, potentially offering a more accessible entry point than detached houses. |
Melbourne | 48.7% | Nearly half of unit suburbs fall below the metro median, with a relatively strong pipeline of new housing providing buyers with more choice. |
Source: PRD Smart Moves: Capital Cities Edition, 1st Half 2026.
In the report, an affordable suburb is defined as one where the median property price sits below the relevant capital city's metro median.
Meanwhile, affordable house suburbs remain much less common, particularly in Sydney and Melbourne.
That doesn't necessarily mean property prices are falling overall. Rather, PRD highlights a combination of slower buyer demand, changing economic conditions and growing interest in higher-density housing is creating more accessible entry points in some markets.
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PRD Chief Economist Dr Diaswati Mardiasmo said the shift reflects changing economic conditions rather than a sudden increase in housing supply.
“What is driving this shift is definitely current economic conditions,” she said.
“The driver of this shift is not because suddenly we have created enough housing or there is an oversupply. It's because demand has slowed.”
Dr Mardiasmo said the findings suggest buyers are increasingly considering higher-density housing because it typically offers a lower entry price.
“Across all capital cities, it's units where you can find affordable suburbs,” she said.
“Buyers are definitely increasingly having to consider units, not only because of the lower entry price, but also because that is what is being built.”
What this may mean for borrowers
Choosing a lower-priced property can help reduce the purchase price, and depending on the buyer's circumstances, it could also reduce the size of the deposit required, the amount they need to borrow and their ongoing loan repayments.
Hamish Crawford, an Aussie Broker at Aussie Stones Corner, said this is changing conversations with borrowers.
“It's probably the biggest shift I think I've seen, where people really wanted to buy a house and that was the Australian dream,” he says.
“But now, if they want to be in a particular area, they do need to consider a townhouse or unit option a lot more. People are accepting that”
Crawford estimates the gap between a median house and unit in many suburbs can be around $500,000. Depending on a buyer's circumstances, that may significantly reduce both the deposit required and the amount they need to borrow.
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Rather than waiting until they can afford their ideal home, Crawford said many buyers are treating a townhouse or unit as a first step into the market rather than their forever home.
“It's about getting started, and then revisiting it down the track,” he said.
An Aussie Broker can help buyers compare different borrowing scenarios across houses, townhouses and units to understand what may be achievable within their budget.
Affordability is changing, not disappearing
For buyers, that means affordability may be less about finding the cheapest property and more about finding the right balance between price, location, lifestyle and long-term goals.
Dr Mardiasmo said five or 10 years ago, an affordable first home often meant a detached house in a middle or outer suburb.
Today, it may instead mean:
a townhouse further from the CBD
a one-bedroom apartment closer to the city
a larger apartment in an outer suburb
or a house located much further from employment centres.
She believes affordability has become less about finding the cheapest property and more about finding the best balance between price, lifestyle and long-term value.
Dr Mardiasmo said affordability is increasingly about finding value rather than simply buying the cheapest property available.
Why flexibility may matter more than timing
While affordability remains a challenge, the data suggests buyers may have more options than they realise, particularly if they're open to different property types or locations. Understanding those options before making an offer may help buyers make a more informed decision.
Crawford said some buyers waiting for what they see as the "perfect time" may find the properties they were targeting become harder to reach over time.
“To me, the perfect time is when you're ready,” he said.
“You might not be able to get your dream home first off, but the longer you wait, the bigger the gap becomes.”
Instead, many buyers are focusing on entering the market with a property that suits their current financial position before reassessing their options later as their income, equity or circumstances change.
That doesn't mean buying sooner will be the right decision for everyone. Before purchasing, buyers should understand the full costs of ownership, including insurance, council rates and ongoing maintenance, and choose a loan that fits comfortably within their budget.
An Aussie Broker can help model different purchase scenarios, explain how different property types may affect borrowing capacity and help buyers understand what may be achievable based on their financial circumstances.
