The Sydney Morning Herald
· collected 2026-09-18 · by Melissa Heagney-Bayliss
The article reports that Melbourne home buyers face an extra $110,000 cost to upgrade from a typical three-bedroom to a four-bedroom house. Domain data shows this price increase is partly due to fewer sellers listing larger homes amid market uncertainty caused by rising interest rates and economic challenges. The widening gap in price per bedroom reflects competition among buyers for available quality stock, with median house prices falling 3.1% in the June quarter despite price hikes for four-bedroom properties.
Written locally by qwen2.5:14b on 2026-09-19,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
Melbourne home buyers face a significant cost increase when upgrading their homes. According to Domain figures, families will need to pay an extra $110,000 to upsize from a typical three-bedroom house to a four-bedroom one, despite the overall property downturn. The price of adding just one bedroom has risen by $22,000 compared to 12 months ago. Those looking to move from a two-bedroom to a three-bedroom home now face an extra cost of $80,000, up from $67,750 last year. Meanwhile, Melbourne’s overall median house price fell by 3.1% in the quarter ending June, marking the steepest decline in almost four years. This increase is attributed to fewer larger homes being listed for sale as potential sellers hesitate due to market conditions, including rising interest rates and economic uncertainty.
Written for “Melbourne Home Buying Costs” on 2026-10-04,
grounded in this article and the 0 other(s) covering the same event.
Melbourne families will need to pay an extra $110,000 to upsize from a typical three-bedroom to a four-bedroom house, even amid the property downturn.
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families → need → downturn
The cost of one extra bedroom is $22,000 more than it was 12 months ago, Domain figures show, as family home owners hesitate to list their properties for sale in a weakening market and buyers compete for the available quality stock.
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buyers → show → stock
The analysis used house price medians of two, three and four-bedroom houses from the June quarter.
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analysis → use → quarter
Those wanting to upgrade from a typical two-bedroom house to a three-bedder will need to pay an extra $80,000.
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Those → want → 80,000
That has expanded from a $67,750 gap a year earlier.
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That → expand → gap
At the same time, Melbourne’s overall median house price fell 3.1 per cent in the three months to June, the steepest quarterly fall in almost four years.
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price → fall → years
Prices slumped as the market grappled with rising interest rates and a higher cost of living which is slashing the amount buyers can borrow, as well as changes to property taxes and broader economic uncertainty.
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buyers → slump → taxes
Domain’s chief residential economist Dr Nicola Powell said the widening gap in price per bedroom still reflected the current market.
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gap → say → market
As prices softened, potential sellers were holding off from listing their homes, reducing the number of larger three-and-four-bedroom homes hitting the market and creating some competition between the buyers still wanting to upgrade.
“If you think about it, larger homes require a larger parcel of land which costs more, and the cost of construction is going up and that is pushing up the price also,” Powell said.
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Powell → soften → price
The price of four-bedroom houses jumped 6.8 per cent over the year, a steeper climb than the 3.6 per cent increase faced by buyers of two-bedroom houses.
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price → jump → houses
Though some buyers would struggle to afford a larger family home, Powell said many were willing to pay the price to set themselves up for the future.
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many → struggle → future
“The extra bedroom comes at a cost, but a lot of people will see it as their long-term home, their family home where they are raising their children as well,” she said.
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she → come → children
The extra expense of buying a larger home is a reality for many families like Ibrahim and Lauren Lamar, and their seven-month-old son Isaac, who are hoping to sell their three-bedroom home in Hoppers Crossing to buy in Oakleigh or Mentone, closer to family.
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who → buy → family
The Lamars are hoping to be able to buy in these more expensive south-eastern suburbs, but are being practical about what they will afford with their budget.
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they → hop → budget
They know a four-bedroom house would be out of reach, given how much more a house costs in those areas.
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house → know → areas
“We’re just seeing what’s out there, for us, what’s feasible for us … hopefully we find something,” Lauren said.
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Lauren → see → something
“I feel like being realistic the perfect place, within reason, would be in Oakleigh - a freestanding townhouse or house on a subdivided lot with three bedrooms and two bathrooms.
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place → feel → bedrooms
While the Lamars are moving across the city to find a new home the same size, others already living in the outer west are hoping to upgrade locally.
Ray White Hoppers Crossing principal agent Shahid Khan said some were making compromises to find a house with an extra bedroom.
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some → move → bedroom
“Some buyers, if they’re upgrading … they’ll get a home with a slightly smaller block to get the fourth bedroom,” Khan said, adding that many locals have their parents living with them and need the extra space for privacy.
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parents → upgrade → privacy
In the inner city and inner northern suburbs, home buyers were also making sacrifices to buy into their suburb of choice.
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buyers → make → choice
Barry Plant Northcote’s Jesse Dolcetta said there were buyers who did not want to live north of Bell Street, paying more for fewer bedrooms to live in Northcote, Thornbury or Brunswick.
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who → say → Northcote
“It’s the biggest conversation I have with clients,” Dolcetta said.
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Dolcetta → ’ → clients
“Some people won’t cross Bell Street even if the value is a lot better ...
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value → cross → Street
It’s a psychological thing of wanting that postcode.”
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It → ’ → postcode
Some were more flexible, he said, moving into areas like Preston or Reservoir to be able to buy a house with more bedrooms.
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he → say → bedrooms
“There’s quite a big spectrum of what people see more value in,” Dolcetta said.
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Dolcetta → ’ → value
“You can get a good family home for 50 per cent of what you’d pay for the same house in Northcote.”
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you → get → Northcote
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