Most expensive cities to live in Australia

Updated 26 March 2024

If you are new to the real estate and mortgage business, it is worth knowing which cities in Australia are the most expensive to live in. Knowing this is vital to managing your clients’ expectations, especially those who may be planning to relocate to one of these cities.

In this article, we’ll look at the most expensive cities in Australia based on recent data. We’ll go over a few factors such as:

• median property price
• cost of living
• population
• other aspects, such as the pandemic

We’ll examine 2 other factors a bit more closely: transportation and food costs.

This article also includes a listing of the most expensive suburbs in Australia.

What is the most expensive city in Australia?

It’s no surprise that Sydney tops this list. What’s surprising is which city comes in third, dislodging Melbourne after holding the spot for 15 years. The pandemic and interstate migrations played a huge factor in the change.

Let’s get started with the most expensive city: Sydney.

1. Sydney

CoreLogic confirmed that Sydney is still the most expensive city in Australia to buy property, having a median house value of almost $1.4 million.

If we include utilities, Sydney costs about 48.51% higher than Adelaide, one of the least expensive cities in Australia.

This is not much of a surprise if we look at the law of supply and demand. Sydney is Australia’s largest centre, with an estimated 2024 population of 5.2 million, according to the World Population Review. Greater Sydney’s population is expected to grow to around 5.9 million by 2035, based on NSW's recent trends.

Sydney also has the highest cost of living among Australian cities. It’s 13% more expensive than Canberra, the second most expensive area in the country.

2. Canberra

As the second most expensive city in Australia, Canberra’s median house value is at $968,248, while the median unit value is $586,891.

In terms of overall cost of living, Canberra is 12% cheaper than Sydney and 9% more expensive than Brisbane.

Data from the latest PropTrack Market Insight Report shows that Canberra is the second most expensive city to rent a house in, with median advertised rents increasing 2.5% in the December 2023 quarter to $610 per week.

3. Brisbane

Brisbane replaced Melbourne as the third most expensive property market in Australia, following Sydney and Canberra. The Sunshine State capital started booming at the beginning of the COVID-19 pandemic.

CoreLogic data shows that property values in Brisbane have risen 50.2% since March 2020.

In Greater Brisbane, the median property price reached $787,000, taking over Melbourne as the third most expensive place in Australia after 15 years.

One of the reasons for this was the higher number of units making up the market in Melbourne compared to Brisbane.

Brisbane’s house prices are still cheaper than Melbourne’s, with the former having an average price of $875,991. Melbourne’s house prices are at an average of $942,041, making a $72,000 difference.

Another reason for Brisbane’s takeover is its higher pandemic boom of 50.2%, compared to Melbourne’s upswing of 11%, CoreLogic said.

Brisbane skyline showing tall buildings against blue sky with colorful plants in the foreground

4. Melbourne

After 15 years of being in third place, Melbourne took the fourth spot as one of the most expensive cities in Australia. Melbourne’s median property prices are sitting at an average of $780,457.

By January this year, Melbourne’s property prices had decreased by 0.1%. The city’s median house value stands at $942,750 while its median unit value is at $608,181.

The house prices in Melbourne did not change in January but unit prices went down by 0.3% over the 12 months prior.

Also, CoreLogic attributed the pandemic-related growth difference of Brisbane and Melbourne to lifestyle factors.

Interstate migration to Queensland became more feasible due to the normalisation of remote work. Melbourne’s extended lockdowns from March 2020 to October 2021 may have prompted people to leave the city.

From March 2020 to March 2022, 51,500 migrated interstate to Queensland, according to the Australian Bureau of Statistics. Meanwhile, around 20,000 people left Victoria over the same period.

Cost of living in the most expensive cities in Australia

Some of the areas we look at when calculating the cost of living in cities are housing, which we discussed earlier, food costs, and transportation costs.

Transportation

Sydney remains the most expensive city for all types of transport, while Canberra costs 25% less.  Brisbane is about 1% cheaper than Sydney in terms of transport, while Melbourne is 18% cheaper.

Below is a table comparing the most expensive Australian cities’ transport costs, according to data from Finder:

Food

Finder data shows that Canberra is the most expensive city when it comes to food. On average, Canberra is 8% most expensive than Melbourne food-wise, while Sydney is 13% cheaper than Canberra.

What are the most expensive suburbs in Australia?

Now that we’ve covered the most expensive cities, let’s look at the most expensive suburbs in Australia. According to a recent report from property website Realestate.com, there are 12 suburbs forming the $5 million-plus property club in Australia.

To be part of this group, a suburb should have recorded at least 10 property sales over the last year.

Most of these suburbs are from Sydney, with Bellevue Hill topping the list. Bellevue Hill’s median property price stands at $9,000,000.

Here’s a list of Australia’s most expensive suburbs:

1. Bellevue Hill
2. Vaucluse
3. Woolwich
4. Tamarama
5. Dover Heights
6. Toorak
7. Longueville
8. Double Bay
9. Rose Bay
10. Clontarf
11. Bronte
12. Mosman

Toorak is in Melbourne, the only suburb on the list that’s outside Sydney. Toorak’s median property price is $5,815,000.

Watch this video to understand how expensive it is and why:

It’s no surprise that Toorak is also part of the list of the most expensive suburbs in Melbourne.

What drives property prices in Australia?

Major demographic factors, not interest rates, account for housing costs in Australia, according to research from property services companies LongView and PEXA.

While interest rates contribute to short-term hikes in house costs, key demographic factors have made Australia one of the most expensive property markets globally, the research shows.

The data released in 2023 showed that official interest rates have both increased and decreased over the last six decades. But notably, house prices in Australia have grown at an average of 7%.

From 1960 to 1988, house prices doubled four times as interest rates increased. And from 1988 to 2021, house prices doubled despite interest rates falling throughout the period.

The rise in house prices has been driven by an increase in land values, with residential land accounting for 48% of Australians’ wealth in 2023, compared to the 34% in 2012.

About 51% of Australians live in only three cities: Sydney, Brisbane, and Melbourne. In comparison, half of the population in Britain lives in the country’s nine largest cities. Meanwhile, half of the population of the United States lives in 36 large cities.

With over half of Australians living in three cities, the population density in those capitals contributed to price pressures.

Key takeaways from the study:

• homeownership rates in the last 40 years have fallen across almost every age group
• people aged 35 to 44 are 18% less likely to own a home compared to those people in 1981
• people aged 24 and 34 are now 20% less likely to own a home

The high house prices in the three cities resulted in long-term consequences for young Australians, according to Glenn King, chief executive of PEXA.

First-time home buyers are forced to buy properties far from the centre of cities. As a result, they are denied opportunities that could improve their quality of life, King said. This includes access to higher paying jobs that are in employment hubs, which are usually in the large cities.

Expert advice on Australia’s most expensive cities

It’s essential for mortgage brokers and agents to familiarise themselves with Australia's most expensive cities. This knowledge is key to helping clients understand the impact of buying property in places like Sydney, Canberra, Brisbane, and Melbourne. In keeping up with these trends, mortgage professionals can give accurate and timely advice to their clients, helping support their goals of purchasing their dream homes.

Do you work as an agent or broker in one of the most expensive cities on our list? Tell us what it’s like in the comments below