With home prices rising, purchasing a property close to the city is becoming more challenging for families.

However, in a number of outer suburbs, three- and four-bedroom houses are still well below their respective capital city medians.

PropTrack's August Home Price Index revealed that house prices in our combined capital cities rose by 6.8% over the past 12 months to reach a new peak. Prices are now 46% higher in our cities than they were in March 2020.

Demand for our capital cities has been strong in the past year, with price growth outpacing regional areas, which saw a 5.4% increase.

This is evident when we compare the median days on market, the typical number of days a property is sold after being listed on-site, to August 2023. In all of our capitals except Melbourne and Hobart, houses were selling faster than they were a year prior.

While these trends are positive for sellers, it is making it more competitive and expensive for families who want to purchase homes in prime locations. However, there are still several outer-ring suburbs, which are within the outermost third from their respective CBDs, with modestly priced three- and four-bedroom houses.

For three-bedroom houses, San Remo, Blue Haven and Lake Munmorah topped the list for affordable suburbs located more than 24kms from the Sydney CBD. The median price of a three-bedroom house was $660,000, $675,000 and $703,000 respectively.

In Melbourne's outer suburbs, Melton South, Melton and Kurunjang had the most competitively priced three-bedroom houses. They respectively cost $465,000, $470,000 and $500,000 which was well below the city's median price of $799,000 for homes that size.

Russell Island, Macleay Island and Laidley had the cheapest three-bedroom houses among Brisbane's outer-ring suburbs.

Cheapest outer-ring suburbs for three-bedroom houses

For suburbs that were more than 16kms from Adelaide's CBD, Elizabeth North, Elizabeth Downs and Davoren Park had the most affordable three-bedroom houses. They were priced between $416,000 and $450,000.

Blue Haven, Bradbury and Blackheath had the cheapest four-bedroom houses among all outer Sydney suburbs, priced at $750,000, $880,000 and $880,000 respectively.

In our second largest capital, Brookfield, Kurunjang and Weir Views led in terms of affordability of four-bedroom houses among all outer-ring suburbs. Median prices were respectively $553,000, $571,000 and $575,000.

Cheapest outer-ring suburbs for four-bedroom houses

For suburbs situated beyond 24km from the Brisbane CBD, Laidley, North Booval and Lowood had the most affordable four-bedroom houses.

In Perth, four-bedroom houses in Armadale, Coodanup and Greenfields cost $530,000, $565,000 and $571,000, respectively. These were the cheapest suburbs for four-bedroom houses located over 20kms from the CBD.

More insights from the expert team at PropTrack

Although interest rates are at their highest level in 12 years, demand from buyers remains strong, especially in competitively priced areas.

We expect this trend to continue as we head into the spring season and activity picks up in the market. With interest rates forecast to fall by early next year, we anticipate that prices will continue rising in the coming months.