The Rise Of $4 Million Suburbs
Nearly double the price of 12 months ago.
Nearly double the price of 12 months ago.
Houses in 465 suburbs – the equivalent of 5% of all housing markets in Australia – now command a $4 million media price, nearly double the price of 12 months ago.
The result is the combination of low-interest rates, high savings, and strong performance in sectors of the economy accelerates the growth according to research by Ray White.
Analysis of 9315 suburbs by Ray White found that one in 10 housing markets had a median price of more than $3 million. Triple what it was a decade ago.
More than half (52%) of all suburbs analysed posted a median price of more than $1 million and one in five is worth more than $2 million.
Over the next few months, 12 more suburbs are set to cross the $4 million threshold including Cammeray, Castle Cove and Castlecrag in Sydney’s lower north shore, Killara in the upper north shore and Balgowlah Heights in the northern beaches and Peppermint Grove in Perth.
Across the country, luxury house has boomed by 70% while premium apartment sales have climbed 40%.
Sydney sits at the top of the market with 2438 houses and 3113 apartments sold since the onset of COVID-19 while Melbourne transacted 744 houses and 396 apartments.
Perth is back on its way up with a 150% rise in the number of $10 million home sales to 181.
Within the country’s hottest luxury market, Sydney, Mosman recorded the highest number of luxury house sales, with 356 worth more than 3.56 billion while Vaucluse came in second with Vaucluse came second with 209 luxury houses changing hands, followed by Bellevue Hill with 184 sales, Bronte with 96 and Killara with 90.
Sydney’s Point Piper is the country’s most expensive suburb with a median house price in the country where the median house price is $15 million.
In Melbourne, Toorak remained the most expensive suburb in the state with median house price at $5.47 million, while Deepdene took the top spot for apartments with a $1.32 million median price.
Ray White defines luxury homes as those priced at more than $10 million and apartments over $3 million
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Data reveals house values have continued to decrease, but the rate has slowed as the RBA Board prepares to meet next week
House values continued to fall last month, but the pace of decline has slowed, CoreLogic reports.
In signs that the RBA’s aggressive approach to monetary policy is making an impact, CoreLogic’s Home Value Index reveals national dwelling values fell -1.0 percent in November, marking the smallest monthly decline since June.
The drop represents a -7.0 percent decline – or about $53,400 – since the peak value recorded in April 2022. Research director at CoreLogic, Tim Lawless, said the Sydney and Melbourne markets are leading the way, with the capital cities experiencing the most significant falls. But it’s not all bad news for homeowners.
“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 percent,” he said. “That has now reduced by a full percentage point to a decline of -1.3 percent in November. In July, Melbourne home values were down -1.5 percent over the month, with the monthly decline almost halving last month to -0.8%.”
The rate of decline has also slowed in the smaller capitals, he said.
“Potentially we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls,” Mr Lawless said. “However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.”
The RBA has raised the cash rate from 0.10 in April to 2.85 in November. The board is due to meet again next week, with most experts still predicting a further increase in the cash rate of 25 basis points despite the fall in house values.
Mr Lawless said if interest rates continue to increase, there is potential for declines to ‘reaccelerate’.
“Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire,” Mr Lawless said.
Statistics released by the Australian Bureau of Statistics this week also reveal a slowdown in the rate of inflation last month, as higher mortgage repayments and cost of living pressures bite into household budgets.
However, ABS data reveals ongoing labour shortages and high levels of construction continues to fuel higher prices for new housing, although the rate of price growth eased in September and October.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’