This article is from the Australian Property Journal archive
THE number of Australian suburbs with a median house or unit value at or above the million-dollar mark has hit an all-time high, at 29.3%.
According to the latest data from CoreLogic, 29.3% of the 4,772 suburbs have a current median at or above $1 million, up from the recent low in January 2023 when it was at 21.7%.
Over the year, the number of million-dollar suburbs increased by 18.5% or 218 markets, with 1,057 suburbs recording a median house value and 112-unit markets at a seven-figure median value. This has since increased to 1,257 and 140 respectively.
This latest figure also surpasses the previous high in April 2022 when the portion of suburbs with a million-plus median was at 26.9%, just before the RBA began its rate hiking cycle.
“At the onset of COVID, just 14.3% of house and unit markets had a median value at or above the $1 million mark,” said Kaytlin Ezzy, economist at CoreLogic.
“With almost 30% of suburbs now posting a seven-figure median, the increase is a natural consequence of rising values and worsening affordability.”
At the same time, CoreLogic also found that almost 30% of all suburbs across Australia’s capitals and regional areas saw a loss in housing values over the past three months.
Though at a national level, there was a 2.0% pace of growth increase over the three months to April to 1.3% over the three months to August.
24 suburbs, including 20 house and four unit markets, with a median value above $990,000 currently recording positive quarterly value growth, since August this year.
Australia’s most expensive capital, Sydney with a median of $1,180,463, maintained the highest share of suburbs in the million-dollar club, with 46 new suburbs entering the club.
Brisbane also saw a 46 suburb increase over the year, as dwelling values increased by 15.0% over the period.
“The positive flow of interstate migration, coupled with a continued undersupply of advertised listings as well as newly built housing stock, has seen Brisbane values rise 65.1% since the onset of COVID,” added Ezzy.
“Such a significant increase in home values has eroded much of the city’s previous affordability advantage, with Brisbane now having the second highest median dwelling value ($875,040) among the capitals.”
Perth saw a 35 suburb increase over the year, with one suburb re-entering the list. With value increases across Perth ranged from a 1.8% rise in Marmion in the city’s north-west, to 10.6% in Henley Brook in the north-east.
“Despite recording the highest annual rise in dwelling values among the capitals and rest of state regions, Perth’s relatively low starting point resulted in fewer new seven- figure markets compared to Sydney and Brisbane,” said Ezzy.
At the same time Melbourne and regional Victoria recorded a decline in dwelling values of 1.0% over the last year.
A household would now need an annual income close to $200,000 to keep repayments on a $1 million home under 30% of their income, with a $800,000 loan balance and the current average variable mortgage rate for new owner-occupiers.
This reflects an increase in annual income needed from $125,000 prior to the first RBA hike of the cycle.
“Despite the increase in the number of million-dollar markets, borrowers are dedicating more of their income towards servicing their mortgage” added Ezzy.
