Demand surges for outer-city markets over first half of 2025
Changing buyer behaviours in Australia’s capital city markets have driven demand outward for property located on the outskirts of Brisbane and Melbourne.
New findings from Domain revealed a widening gap between property prices and buyer expectations in Australia’s inner-city markets, reshaping buyer behaviour in Brisbane and Melbourne.
Domain’s analysis of buyer search data and current property listings revealed a growing gap, up to $1 million in some prime areas, between actual prices and buyers’ expectations in Brisbane and Melbourne inner-city.
For houses located less than 10 kilometres from Melbourne’s central business district, Domain recorded the search price as $1,200,000, which was $310,000 less than the median listing price of $1,510,000.
While this difference increased to more than $900,000 for houses in areas such as Boroondara and Stonnington-West, the mismatch was also observed for townhouses and units located as far as 20 kilometres away from Melbourne CBD, where buyers’ budgets were still $198,000 short.
Despite demand for houses remaining strong, Domain noted that as far as just 10–20 kilometres away from the Melbourne CBD, buyers’ budgets were $22,000 short of list prices, while price expectations for units were $10,000 higher than list prices at this distance from the CBD.
Domain’s chief of research and economics, Dr Nicola Powell, said that affordability pressures and a desire for well-located housing had driven a surge of interest for townhouses and units around the Melbourne CBD.
“We’re seeing sustained demand for well-located, medium and high density housing like townhouses, apartments, and mixed-use developments within 20 kilometres of the CBD, as well as increased interest in outer suburb areas and growth corridors,” Powell said.
The disconnect was also seen in the Brisbane market, where inner-city home buyers have been facing an even greater shortfall of $350,000 between expectations and list prices, which increases to $800,000 within markets such as Brisbane Inner.
Houses in middle-ring suburbs such as Sherwood-Indooroopilly have been $500,000 higher than buyer expectations, indicating that price growth is outrunning buyer budgets in once considered “aspirational-but-attainable” suburbs.
As part of this broader shift, Domain noted that buyer searches beyond 20 kilometres of the Brisbane CBD have increased by 37.5 per cent since 2020, while interest for properties within 20 kilometres has instead declined by 13.4 per cent over the same period.
Following the market shift, Domain said that buyer expectations for houses located over 30 kilometres from Brisbane inner-city were exceeding listing prices by up to $8,000.
On the opposite end of the spectrum, buyer budgets exceeded listing prices by up to $100,000 for townhouses and up to $301,000 for units in Brisbane’s outer suburbs.
Domain said the mismatch was representative of a broader shortage of large, high-quality homes in the city.
Powell said that the relationship between buyer expectation and actual list price in Brisbane was an indication that buyer behaviour had changed in the city, with purchasing preferences shifting towards well-located, medium and high-density housing.
“Brisbane’s rapid property price growth is forcing many buyers to make tough trade-offs, either compromising on location or adjusting their expectations around property type,” Powell concluded.