Anyone hoping to buy a home for less than $400,000 has slim pickings in the capital cities.
Sales below $400,000 were at a record low in 2014-15 while sales above $1 million were at a record high.
Cheaper properties are becoming scarce in the capitals as home values rise, property information and analytics firm CoreLogic RP Data says.
The lack of cheaper properties under $400,000 is making it much harder for price-sensitive buyers to purchase a home in the capital cities, senior research analyst Cameron Kusher says.
"Although we anticipate that the rate of capital growth will slow over the coming year, we still expect values to generally rise," Mr Kusher said.
"As a result we would expect a further decline in the proportion of homes selling below $400,000."
Nationally 37.4 per cent of home sales were at less than $400,000 in 2014/15 but in the capital cities the figure was 25.1 per cent.
Even five years ago about a third of all capital city house sales were for less than $400,000, Mr Kusher said.
"Even in those other capital cities where we've seen very little growth in values over the last few years, we're still seeing a deterioration in the number of homes available under $400,000," he said.
Mr Kusher said developers are finding it hard to deliver new housing stock for price points under $400,000.
"In an ideal world you would think that brand new housing should be cheap further away from the city centre in most instances, as it's technically a little bit less desirable than those areas closer to the city.
"We're just not getting that supply there, and obviously even $400,000 is expensive for a lot of people.
"I'm sure a lot of people would like to spend a lot less than that on housing but it's a real challenge."