Australians are scrapping over the last "patches of dirt" left in the inner cities as a chronic undersupply of homes pushes buyers to their limits.

Fresh data from online listings platform Domain reveals a yawning gap between what buyers can afford to pay for freestanding homes and what is available on the market.

In Sydney, Melbourne and Brisbane, buyer searches for houses are $300,000 cheaper than the median listing prices within 10km of the city centre, Domain found in a report released on Wednesday.

"For houses, it really does show that that inner ring is pretty much unattainable for most buyers that are searching in that area," Domain chief economist Nicola Powell told AAP.

Price gaps for houses narrow substantially the further out buyers look, with the exception of Sydney, where

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