Under $1 million: why buyer choice has tightened across the capitals

For buyers shopping for houses under $1 million, the biggest challenge right now isn’t simply how much homes cost — it’s how many there are to choose from.

Across Australia’s capital cities, listings data shows that many of the house markets still accessible below $1 million have become tighter over the past year. In practical terms, that means fewer new homes coming onto the market, less choice at any given time, and more competition when a well-priced property does appear.

This shift helps explain why many buyers feel the process has become more stressful, even in areas where prices haven’t surged. When supply thins, buyers are forced to move faster, compromise more, and compete harder — regardless of whether headline prices are rising or flat.

What’s driving this isn’t a sudden jump in demand. Instead, it’s a shortage of sellers. Higher interest rates have reduced discretionary selling, some investors are holding onto rental stock, and many potential movers are delaying decisions until conditions feel clearer. The result is a quieter but important tightening of supply, especially in the under-$1M house segment where buyer demand is deepest.

Sydney provides a clear example of how this plays out. While much of the city’s housing stock now sits well above $1 million, there are still pockets where houses trade below that threshold. In those areas, listings have generally failed to expand. Even modest declines in listings can have an outsized effect because buyers in this price range have limited substitutes. When fewer homes come to market, competition quickly concentrates on the same small group of properties.

A similar pattern is evident in Melbourne. While the city overall has not experienced the same price acceleration as some other capitals, many of Melbourne’s under-$1M house markets have seen listings tighten rather than loosen. Buyers may still find prices that feel relatively accessible compared with Sydney, but they are often working through fewer options spread across multiple suburbs. That lack of choice, rather than price pressure alone, is what makes the search feel difficult.

Brisbane also illustrates the point. The city still offers a wider range of houses under $1 million than Sydney or Melbourne, particularly in outer and middle-ring areas. However, in several of those markets, listings have declined over the past year. As a result, buyers are not necessarily benefiting from greater choice, even though prices remain lower. Instead, competition remains firm on family-friendly homes, and buyers often need to act quickly when a suitable property becomes available.

What’s important to understand is that these conditions are not uniform. There are exceptions. In a small number of under-$1M house markets, listings have stabilised or even increased, giving buyers more room to compare options and negotiate. In those areas, the buying experience feels markedly different: inspections are less crowded, decisions can be made with more confidence, and buyers are less likely to feel forced into compromises.

But those markets are increasingly the exception rather than the rule.

For most under-$1M house buyers in the capitals, the defining feature of the current market is constrained choice. Instead of scanning dozens of suitable listings, buyers are often monitoring a short list and waiting for the next viable option to appear. That dynamic encourages broader search strategies — across multiple suburbs or even across neighbouring areas — and places a premium on preparation.

This is also why some buyers in this segment are leaning more heavily on professional support. In tight markets, access to early information, off-market opportunities, and a clear understanding of value can make the difference between securing the right home and missing out repeatedly. When listings are scarce, the margin for error shrinks.

The broader takeaway is that price alone no longer tells you how hard it will be to buy. Two under-$1M house markets can look similar on paper but feel very different on the ground depending on whether listings are tightening or easing. In today’s capital-city housing market, understanding supply conditions has become just as important as understanding what you can afford.

That’s exactly what listings data reveals. And for buyers under $1 million, it explains why choice has tightened — and why the search now demands more patience, flexibility and planning than it did just a few years ago.