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Australia’s supply of cheap houses has dried up in almost all capital cities in the past 10 years.
The share of capital city houses priced under $400,000 fell from 66.2 per cent in June 2005 to 34.1 per cent in June 2010 and then to 21.4 per cent in June 2015, according to CoreLogic RP Data.
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Inflation partly explains this change: Australia’s inflation rate increased 64 per cent during that decade, making $400,000 in 2005 equivalent to $656,000 today.
However, the size of the change suggests that inflation isn't the sole cause.
Canberra is the city with the smallest percentage of houses below $400,000. This decreased from 61.5 per cent in 2005, to 18.5 per cent in 2010, and to 7.4 per cent in 2015.
Sydney’s share fell from 33 per cent in 2005, to 27.8 per cent in 2010, and to 7.8 per cent in 2015.
The struggling Perth and Darwin markets occupy the next two places. Perth fell from 80.1 per cent in 2005 to 31.2 per cent in 2010 and to 15.5 per cent in 2015. Meanwhile Darwin fell from 90.4 per cent in 2005 to 22 per cent in 2010 and to 16.7 per cent in 2015.
Melbourne’s share of houses below $400,000 declined from 69.2 per cent in 2005 to 35.8 per cent in 2010 and to 23.8 per cent in 2015.
In Brisbane, 73.6 per cent of houses in 2005 were priced below $400,000 compared with 33.1 per cent in 2010 and 30.4 per cent in 2015.
Adelaide moved from 83.1 per cent in 2005 to 53.8 per cent in 2010 and to 44.7 per cent in 2015.
Hobart is the only city in Australia were most houses are still priced under $400,000, after the share fell from 86.2 per cent in 2005 to 64.7 per cent in 2010 and to 61.2 per cent in 2015.
Meanwhile, the share of capital houses priced at $1 million and above increased from 4 per cent in 2005 to 10.1 per cent in 2010 and 18.3 per cent in 2015.
The share of houses priced between $400,000 and $1 million climbed from 29.9 per cent in 2005 to 55.8 per cent in 2010 and 60.3 per cent in 2015.
[Related: Chinese investor influence exaggerated]
