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Sydneysiders considering a sea-change to regional New South Wales may find that for almost the same home loan size, they could move to Melbourne.
The gap between the average mortgage size prospective home buyers are looking for in regional NSW and greater Melbourne has narrowed to less than $40,000, according to Equifax data, which shows eight years ago, the gap was around $100,000.
According to Equifax, the average mortgage enquiry amount for a property in regional NSW grew from $432,600 in the first quarter of 2018, when the data first became available, to $770,600 in the fourth quarter of 2025. By comparison, in Melbourne the average home loan enquiry jumped from $531,900 to $810,100.
Some Sydneysiders have decamped to coastal towns in recent years, searching for cheaper housing and a more relaxed lifestyle. But Melbourne, where property prices have largely stagnated, may offer relative affordability along with job opportunities and the amenities of a large city.
Equifax chief solutions officer Kevin James said the size of mortgage inquiries was an indicator of mortgage demand that reflects economic shifts, like interest rate changes which can squeeze borrowing capacity.
“If you don’t want to live regional, there’s not much in it between regional New South Wales and Melbourne,” he said of current enquiry levels.
From a historical perspective, James said the size of the average mortgage enquiry in the two spots almost crossed over in 2024 due to factors including the Victorian land tax increase.
“Victoria essentially slowed its investor market through taxation, causing prices to stagnate, while regional NSW absorbed the overflow of Sydney buyers armed with regional-specific government incentives,” he said.
KPMG urban economist Terry Rawnsley said Melbourne had become relatively more affordable over time due to having “done a pretty good job in terms of housing supply,” with around 20 per cent of the country’s population, but up to 25 per cent of dwelling approvals.
“The reason Melbourne’s going to do that is we’ve got these big, lovely greenfields not too far from the city, especially in the west, where there’s just vast tracts of land which is being turned into housing,” he said.
One home buyer from Sydney who has been the beneficiary of this is Kanaan Eletri, 27 and a builder, renting with his wife in south-west Sydney. Together, they bought a four-bedroom, two-bathroom house and land package in Deanside, about 24 kilometres west of Melbourne’s CBD.
Initially pegged as an investment, Eletri said the couple was now considering moving into the property once construction is completed. The mortgage repayments would be cheaper than their Sydney rent, and they would be closer to family. Affordability was a key reason for purchasing in Melbourne.
“A million dollars doesn’t get you far here, to be honest,” Eletri said of Sydney.
“It might buy you a townhouse in an outer western suburb, an hour from the CBD, but that’s probably where your luck comes to an end.”
Eletri is not alone. Jarrod McCabe, a director at Wakelin Property Advisory said his office recently helped clients from Marrickville, in Sydney’s inner west, purchase a property in West Brunswick which they may move into in 12 months.
McCabe said those making the move from Sydney were likely to want “that metropolitan lifestyle,” rather than moving to a regional area.
“There’s a lot of benefits to Melbourne as a capital city that translate from Sydney. It’s just that the property prices are far more attractive at the present time.”
Sam Rigopoulos, Jellis Craig Inner North group managing director, has also noticed Sydneysiders taking a closer look at Melbourne.
“I think if you look at what that costs you 10 kilometres from the CBD in Sydney…it’s probably 50 per cent of the… value to invest in the inner north,” he said.
This comes as house prices in Sydney, and some parts of regional NSW, have grown faster than Melbourne’s. Melbourne’s median house price rose by 7.4 per cent over the year to the end of December, on Domain data, while regional NSW house prices jumped 9.2 per cent.
“Sydney, to a degree, helps set the prices for regional NSW. So, if Sydney is going through a boom, the ripple effect just impacts on your Wollongongs, your Southern Highlands, your Hunter Valleys, your Newcastles,” Rawnsley said.
While there has been a trend towards regional living post-COVID, Rawnsley said there remained reasons why city living remained attractive for home buyers, including a more comprehensive services offering, including medical, and a “deeper pool” of cultural activities.
Cities also have a more diversified employment market, unlike smaller towns which may only have a single industry.
“That sort of depth of the labour market makes it sort of easier for you and your partner to find jobs as well,” Rawnsley said of cities.
Beau Arfi, the director and founder of Maple Investment Group, which assisted Eletri with his Deanside purchase, said home buyers were getting more for their money in Melbourne.
“Purely from a market cycle where it’s at…it hasn’t experienced that growth in the last five years that a lot of the other capital cities have,” he said.
