RP Data figures show the total value of dwelling sales across the country was almost $213 billion for the year to July 2010. Five years prior, the total value of sales across the country equated to more than $165.5 billion. Over the last five years the total value of residential property transactions has increased by 30%.
These statistics highlight both the increasing demand for dwellings and the growth in the values of property during the last five years. For vendors, these conditions equate to additional profit to be made from the sale and for property professionals it translates into additional commission.
Based on an approximate commission rate of 2.5%, the amount of stock transacted over the last year afforded agents a total commission of $5.3 billion.
When looking at those suburbs which have recorded the greatest total value of sales for houses there are some interesting trends to note. Only one of the top five performers in each state has recorded a fall in median price over the last 12 months – Mosman Park in Perth.
Of the 40 suburbs detailed, the median price is $550,000, the average number of annual sales is 231. These suburbs account for $8.7 billion dollars worth of house sales during the 12 months to July 2010 or 5.3% of the total value of sales nationally during the year. The findings show that it isn’t necessarily the most expensive suburbs, nor is it those with the greatest number of sales which will account for the greatest total value of sales. The most affordable suburb making the list was Devonport with a median price of just $250,000 and the most expensive was Bellevue Hill with a median of $3.91 million.
Across those suburbs listed, 36 of the 40 suburbs detailed are within capital city regions whilst three of the remaining four are located on either the Gold or Sunshine Coasts in South East Queensland.
Across the country, the suburb which has recorded the greatest total value of sales during the year was Sydney’s Mosman. The median house price in the suburb is $2.1 million and the 329 house sales during the last year has accounted to almost $851 million worth of property transactions which is less than 0.5% of the total value of property transacted during the last 12 months. Assuming an average agents commission of 2.5%, this equates to almost $21.3 million worth of commission within the suburb.
The unit market results show a number of similarities with the housing market results.
Like the housing market results, only two of the suburbs (Hope Island and Southport both Qld) recorded a fall in median unit price over the 12 months. Many of the other suburbs detailed recorded growth in excess of 10% for the year.
Of the suburbs listed, the median price across the list of 40 suburbs is $459,800, the average number of annual sales is 331. The total commission across these suburbs equates to $7.76 billion or 3.6% of the total value of sales nationally for the year. Tasmania’s Devonport is the most affordable suburb listed for units with a median price of $237,500 and Sydney’s Manly is the most expensive with its median price recorded at $692,500.
The result for the number of capital city suburbs listed for units is the same as that of the housing market (36) and three of the four suburbs listed outside of the capital cities are situated on Queensland’s Gold Coast.
Over the 12 month period, Surfers Paradise had the greatest total value of unit transactions with more than $525 million worth of unit product changing hands. The suburb has recorded a median unit price of $366,000 and 1,141 sales during the last year.
The results for houses and units detail that the suburbs with the greatest total value of sales are typically inner city higher density markets, well established housing markets with either significant supply or a combination of supply and premium prices.
The next time it seems as if there are a lot of real estate agents or mortgage brokers in one of these the areas you can now understand why, because these suburbs have the greatest amount of commission to be earned.
Tim Lawless is the Director of Property Research at RP Data.
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