This article is from the Australian Property Journal archive
2022 saw a record number of house and unit markets at the suburb level with a median value at or exceeding $1 million, before falling off this year, according to CoreLogic’s Million Dollar Market report.
As of May 2023, just 988 – or 22.3% – of the 4,436 house and unit markets analysed still had a median value at or above $1 million, down from 1,243 – or 28.0% – recorded this time last year.
Fewer houses are making the cut in 2023, with many of last year’s new entrants dropping from the ranks, thanks in large part to 12 near-consecutive interest rate rises.
Falling 9.1%, CoreLogic’s own Home Value Index saw its sharpest decline on record over the 10 months between April 2022 and February 2023.
Though so far, the housing downturn has appeared short lived, with national dwellings values up 2.3% over the last three months, while still remaining 6.9% under the recent peak.
Over the year, 237 house markets and 19 unit markets dropped below the $1 million mark, with just one market entering the million-dollar club in WA’s coastal suburb of Burns Beach.
Sydney, which saw the largest peak-to-trough decline in values of 13.8%, saw the largest volume of suburbs falling below a $1 million median, at 78 house and unit markets.
“While declines across Sydney’s more expensive markets were some of the largest across the country, many of these markets had a relatively high starting point allowing them to retain the seven-figure price tags,” said Kaytlin Ezzy, economist at CoreLogic.
“The trend among the suburbs where values have fallen below $1 million is in the more affordable locations on Sydney’s outer mortgage belt and fringe areas. Despite recording smaller declines it’s these suburbs where median values have dropped million-dollar threshold.”
Brisbane saw 41 house and unit markets fall below the $1 million mark, with Melbourne following with 30 markets, Canberra with 15, Hobart with six, Adelaide with four and Perth unchanged.
The regions also reported strong declines, with a decline of 47 markets for Regional NSW, 23 for Regional Queensland and 11 for Regional Victoria.
“Despite the decline in the number of million-dollar markets across Australia, the portion of properties selling for $1 million or more has actually held fairly steady over the year to March at almost one in four properties, suggesting high-end buyers are still active in the market,” added Ezzy.
“The cash rate will have an impact on the performance of million-dollar suburbs. Historically, increases in the cash rate have put downward pressure on market values and many economists and banks have lifted their forecast for where rates might peak following June’s increase. It’s likely this will delay the return of some house and unit markets to the million-dollar club.”
