It is all in supply and demand - whether in AU, NZ, UK, or here in the US. People want the house size/style and property size/location of their choice (whether for practical reasons like better schools or shorter commute or just to impress others).
I'm beyond the commute stage (semi-retired, do some consulting from home), better schools are only a factor if you have school-age children, and I don't feel the need to impress anyone. We moved to a new (to us) house a couple of years ago because the old house wasn't big enough for our children and their families to stay with us when they visited (they live 150 to 600 miles away) and the old neighborhood was going to rental property.
The new house is about 30 years old, brick, two stories plus a drive-in basement, and has a double garage. The conditioned space is about 2800 sq ft (doesn't include the garage) on a 1/2 acre lot. Nearly everything is within one mile - supermarket, deli, fast food, auto repair, library, post office, dry cleaner, bank, pharmacy. Within two miles is nearly evrything else - home/garden supply, office supplies, hospital, restaurants of many varieties, and the nearest fire/rescue station.
Choosing an older but stable (typically one house on the market each year) neighborhood meant a price of $200000US (about 80% covered by the proceeds from selling the previous house). A more "prestigious" location (gated community and/or brick signs with the subdivision name) or new construction would have been 3 to 5 times that price (staying within 20 miles of the original house).
It's a grandchild-friendly location on a cul-de-sac, with a long driveway for riding toys and a rope swing from one of the trees. The family that moved in next door with children near the ages of our grandchildren was an unpriced, but priceless, bonus.
The neighborhood has a very low crime rate, even for petty theft - the postal service, UPS, and FedEx all leave packages on the porch unless a signature is required. The only time I see a patrol car in the neighborhood is when they're watching for people running the stop signs at the tee intersection leading into the subdivision.
The house across the street was on the market earlier this year at about the same price. It sold in less than 60 days.
This is in the Atlanta, Georgia, area. An equivalent older house in the northeast US (NY, NJ) or most areas of California could easily be 5 to 7 times as much.
John
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