Key takeaways:
Melbourne and Canberra have softened while Brisbane and Perth's median dwelling values now sit above $1 million, reshaping affordability across Australia's capitals.
Less competition may be giving buyers more choice, with some brokers reporting improved negotiating conditions and fewer bidders at auctions.
Borrowing capacity remains the biggest hurdle, regardless of where buyers choose to purchase, making preparation more important than trying to time the market.
Understanding your budget early may help buyers act confidently when the right property becomes available.
For many Australians, buying a first home has become less about chasing the hottest property market and more about finding a city where their budget can go further.
That shift is changing where buyers are looking.
Over the past few years, strong home value growth has pushed Brisbane and Perth's median dwelling values above $1 million. As those cities have become more expensive to enter, some first-home buyers are taking a fresh look at Melbourne and Canberra.
As those markets have become more expensive, some first-home buyers appear to be broadening their search to cities where their borrowing power may stretch further.
According to Cotality's June Home Value Index, Melbourne's median dwelling value sits at $808,486 and Canberra's at $885,254. Meanwhile, Brisbane, Perth and Sydney each recorded median dwelling values above $1 million
City | Median value | Quarterly change | Annual change |
|---|---|---|---|
Sydney | $1,265,608 | -3.20% | 0.30% |
Melbourne | $808,486 | -2.60% | -0.90% |
Brisbane | $1,118,306 | 1.30% | 17.40% |
Adelaide | $945,868 | 1.30% | 11.60% |
Perth | $1,046,551 | 2.00% | 23.90% |
Hobart | $752,760 | 1.40% | 9.30% |
Darwin | $638,187 | 5.00% | 19.80% |
Canberra | $885,254 | -1.30% | 2.90% |
Combined Capitals | $1,024,840 | -1.30% | 6.10% |
Combined Regional | $771,642 | 1.10% | 11.00% |
National | $937,722 | -0.70% | 7.30% |
Source: Cotality National Home Value Index, June 2026
For Australians who are flexible about where they buy, that changing landscape may create opportunities that weren't available to some buyers a year or two ago.
Why the affordability conversation is changing
The key shift isn't that Melbourne or Canberra have become inexpensive.
Rather, as Brisbane and Perth have moved above the $1 million median dwelling value mark, Melbourne and Canberra now have lower median dwelling values than Brisbane and Perth, changing the relative affordability picture across Australia's capitals.
At the same time, both cities have recorded softer market conditions. Melbourne dwelling values declined 2.6% over the June quarter, while Canberra fell 1.3%. Brisbane and Perth, meanwhile, continued to record quarterly growth. Despite Sydney falling by 3.2%, the city still maintained a median dwelling value above $1 million.
For first-home buyers, the shift isn't just about price. Depending on their borrowing capacity and deposit, it may mean a broader range of properties fall within reach or less competition when making an offer.
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Softer conditions may give buyers more breathing room
Buying a home isn't just about affordability. It's also about competition.
Andrew Cameron of Aussie Belconnen said conditions in Canberra have shifted noticeably in recent months.
Earlier this year, Cameron said many first-home buyers looking to purchase around the 5% Deposit Scheme’s previous ACT price cap repeatedly missed out at auction.
That cap has now increased to $1 million in the ACT. Previously, the property price cap was $750,000.
Now, Cameron said he had buyers secure properties after competing against only one other bidder.
“They (first-home buyers) can also see that they're more in the driver's seat,” Cameron said.
“They're more willing to step in because they're not chasing the market like they were three months ago.”
He's also noticed vendors becoming more open to negotiating finance conditions, giving buyers greater flexibility than during stronger market conditions.
You might also be interested in: Could waiting to buy a home cost you in the long run?
Those observations reflect broader market trends identified by Cotality’s June Home Value Index.
The property research group said buyers now have more advertised stock to choose from, lower auction clearance rates and less urgency in their decision-making, creating improved negotiating conditions in many capital cities.
“The combination of weaker clearance rates and higher listings is a clear sign that buyers are regaining leverage,” the report noted.
For buyers, that may mean more time to compare properties, negotiate on price or conditions, and avoid feeling pressured into making quick decisions.
Borrowing capacity still shapes what's possible
Even in softer markets, affordability remains about more than the purchase price.
Adrian Sbaraglia, an Aussie Broker in Melbourne's Point Cook, said borrowing capacity continues to be the biggest challenge facing many first-home buyers.
“We're trying to get people to sit down, see where they are, and plan for the future,” he said.
“Most people just say they want to buy a house. They look around first, then they come back and realise they can't afford that house, or the repayments are going to be way too high.”
Sbaraglia said many buyers are also discovering there's limited stock available in the price ranges that maximise Victorian stamp duty concessions, making realistic budgeting even more important.
Rather than focusing solely on house prices, many first-home buyers are adjusting their expectations by considering apartments or townhouses, expanding their suburb search or putting together a longer-term savings plan.
You might also be interested in: Cheapest suburbs to purchase property in every capital city
Preparation may matter more than trying to time the market
With market conditions evolving, some buyers may wonder whether it's worth waiting for prices to soften further.
Brokers say that question depends on individual circumstances.
Rather than trying to predict short-term market movements, many conversations are centred on understanding borrowing power first, then being ready to act when the right property becomes available.
Cameron said pre-approval has become particularly valuable in the current market.
“I think it's always important, but probably even more important in this market,” he said.
“Vendors are generally more willing to negotiate with buyers who already have their finance sorted.”
Knowing your borrowing capacity before you begin inspecting homes may also help narrow your search, avoid disappointment and give you greater confidence when making an offer.
What this means for first-home buyers
While Melbourne and Canberra remain expensive markets, changing conditions may mean some first-home buyers have more options than they did a year ago.
Ultimately, deciding where and when to buy depends on more than median property values. Understanding your borrowing capacity, weighing up your lifestyle goals and choosing a property you can comfortably afford are likely to have a greater impact than trying to predict where the market will move next.
An Aussie Broker can help you understand your borrowing power, compare loan options and explore available government support schemes so you can make an informed decision based on your circumstances.