New research reveals that lower-value homes — particularly those priced just below the updated 5% deposit scheme caps — are outperforming more expensive properties in key Australian markets.

In Melbourne’s Inner East, homes under $950,000 climbed 1.7% in October, far exceeding the 0.4% rise seen among higher-priced dwellings.

Sydney’s prestige pockets have seen similar results. Properties on the Northern Beaches priced below $1.5 million lifted 0.9%, while upper-tier homes were flat. The pattern extends beyond capital cities, with regional markets such as Geelong and the Central Coast ranking among top performers. Darwin has also recorded solid growth, likely driven by a rise in investor activity seeking value and rental yield.

Although the correlation with the government’s 5% deposit scheme is compelling, analysts note that the trend predates its expansion. Instead, it reflects the broader forces of affordability and scarcity. Buyers are chasing attainable entry points into expensive areas, fuelling strong competition for homes within the lower to mid-price ranges.

This momentum suggests that buyers are prioritising value and accessibility, while sellers in these segments benefit from elevated demand. For investors, it’s another signal that growth potential remains strongest where affordability meets limited supply.