Sydney’s Point Piper consolidated its position as Australia’s most expensive place to buy a house with a median house price of $5.21 million across 14 sales over 2011.
The desirability and prestige of a Point Piper address is clear when you consider that the median selling price in that suburb was almost $1 million more than in Tamarama, which is Australia’s second most expensive suburb and just a 6km drive from Point Piper.
The number of suburbs with a median house or unit price of $1 million or more fell by 13.8% in 2011 compared to 2010, with the result reflective of the weak performance of the premium housing market in 2011.
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A total of 194 suburbs across the country had a median house price of $1 million or more in 2011.
To be considered for the list of the Top 10 most expensive, the suburb had to have at least 10 sales over the 12 months to December 2011.
The results also showed that the number of suburbs on the list remains higher than in 2009, however this is a drop of 31 suburbs on what was recorded in 2010.
Over the past 10 years, the number of suburbs with a median house or unit price of $1 million or more has increased from just 43 suburbs nationally to a peak of 225 suburbs nationally in 2010. Excluding Tasmania, each state has recorded a suburb with a median sale price of $1 million or more over the past 10 years.
Back in 2002, only New South Wales, Victoria, Western Australia and the Australian Capital Territory had suburbs with a median price of $1 million or more with approximately 91% of all suburbs located in New South Wales.
In 2011, only Tasmania and Northern Territory did not have a suburb with a median price of $1 million and only 59.5% of suburbs were in New South Wales. The results highlight the stronger value growth conditions outside of New South Wales over the past decade.
Longer term, the suburbs with a median price of $1 million steadily trended higher over the past 10 years, which is line with the general upward trends in property values over the past decade.
In fact, the 2008 and 2011 calendar years are the only two years where the number of suburbs fell in comparison to the previous calendar year. These were also the only two calendar years over the past decade when capital city home values recorded an annual decline.
Based on the RP Data results, the fall in the number of suburbs with a $1 million price tag in 2011 is commensurate with the broader market conditions.
The RP Data-Rismark Stratified Hedonic Index is a reliable indicator which shows that across the 2011 calendar year, the most expensive 20% of capital city suburbs recorded a value fall of 4.8% over the year compared to falls of 1.6% for the most affordable 20% of capital city suburbs, and a 2.9% value fall across the broad middle 60% of suburbs.
Overall, the decline in the number of million dollar suburbs over the 2011 calendar year reflects the broader market conditions in which property values fell, fewer property transactions took place and demand for premium housing was particularly weak.
For the coming 12 months, we are not expecting a substantial improvement in the premium housing market and subsequently it appears unlikely that there will be a significant change in the number of suburbs with a median price of $1 million or more.
The anticipation is that this market sector will continue to be weighed down by the poor performance of the equities market, the unstable global economic situation and lower levels of demand for debt by cautious consumers.
In particular, luxury items such as homes that cost a million dollars or more appear to have lower levels of demand as consumers show a more conservative approach to spending their money.