220 Suburbs Record $1m-Plus For Every House Sold
The tally is likely to rise over the next 12 months.
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A total of 220 suburbs recorded every house sold or settled at or above $1 million last year, according to data from CoreLogic.
Sydney, unsurprisingly, accounted for nearly two-thirds of the overall tally with 135 suburbs transacting at $1 million or over for each house as the NSW capital experienced a 29.6% surge in house prices during the year.
While Sydney dominates the list, Brisbane and Adelaide were poised to see the biggest rise in the proportion of homes selling for at least seven figures, with both capitals enjoying strong growth momentum, according to CoreLogic research director Tim Lawless.
“We are expecting the Brisbane and Adelaide markets to show a stronger return relative to the larger cities this year,” Mr Lawless said.
“Similarly, the regional markets around the country, especially those within commuting distance of the largest capitals, seemed well-positioned to grow their share of premium-valued properties.”
Melbourne saw 27 suburbs where every house sold for $1 million or more with the majority located in Bayside, Port Phillip, Banyule or in the Mornington Peninsula areas.
Regional NSW recorded 37 suburbs where every house was sold for over a million with the Byron and Shoalhaven regions taking the lead. Regional Victoria by comparison had six suburbs, Queensland, four and WA, one.
Proportionally, the ACT has posted the most dramatic gain of million dollar-plus sales — up 21.1% to 39.1%.
In Brisbane, the share of million dollar-plus sales nearly doubled to 19.3% while Melbourne was up 10.2% to 41.5% of overall sales.
Sydney again saw the largest slice of million dollar-plus homes in its market with 63.1% of all transactions over the mark.
So too Sydney’s million dollar-plus unit sales, with the NSW capital accounting for 29.8% of all unit sales worth above a million dollars.
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This may be contributing to continually rising weekly rents
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There has been a substantial increase in the number of Australians earning high incomes who are renting their homes instead of owning them, and this may be another element contributing to higher market demand and continually rising rents, according to new research.
The portion of households with an annual income of $140,000 per year (in 2021 dollars), went from 8 percent of the private rental market in 1996 to 24 percent in 2021, according to research by the Australian Housing and Urban Research Institute (AHURI). The AHURI study highlights that longer-term declines in the rate of home ownership in Australia are likely the cause of this trend.
The biggest challenge this creates is the flow-on effect on lower-income households because they may face stronger competition for a limited supply of rental stock, and they also have less capacity to cope with rising rents that look likely to keep going up due to the entrenched undersupply.
The 2024 ANZ CoreLogic Housing Affordability Report notes that weekly rents have been rising strongly since the pandemic and are currently re-accelerating. “Nationally, annual rent growth has lifted from a recent low of 8.1 percent year-on-year in October 2023, to 8.6 percent year-on-year in March 2024,” according to the report. “The re-acceleration was particularly evident in house rents, where annual growth bottomed out at 6.8 percent in the year to September, and rose to 8.4 percent in the year to March 2024.”
Rents are also rising in markets that have experienced recent declines. “In Hobart, rent values saw a downturn of -6 percent between March and October 2023. Since bottoming out in October, rents have now moved 5 percent higher to the end of March, and are just 1 percent off the record highs in March 2023. The Canberra rental market was the only other capital city to see a decline in rents in recent years, where rent values fell -3.8 percent between June 2022 and September 2023. Since then, Canberra rents have risen 3.5 percent, and are 1 percent from the record high.”
The Productivity Commission’s review of the National Housing and Homelessness Agreement points out that high-income earners also have more capacity to relocate to cheaper markets when rents rise, which creates more competition for lower-income households competing for homes in those same areas.
ANZ CoreLogic notes that rents in lower-cost markets have risen the most in recent years, so much so that the portion of earnings that lower-income households have to dedicate to rent has reached a record high 54.3 percent. For middle-income households, it’s 32.2 percent and for high-income households, it’s just 22.9 percent. ‘Housing stress’ has long been defined as requiring more than 30 percent of income to put a roof over your head.
While some high-income households may aspire to own their own homes, rising property values have made that a difficult and long process given the years it takes to save a deposit. ANZ CoreLogic data shows it now takes a median 10.1 years in the capital cities and 9.9 years in regional areas to save a 20 percent deposit to buy a property.
It also takes 48.3 percent of income in the cities and 47.1 percent in the regions to cover mortgage repayments at today’s home loan interest rates, which is far greater than the portion of income required to service rents at a median 30.4 percent in cities and 33.3 percent in the regions.
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