The number of suburbs with median house prices above $1 million fell both in Melbourne and Sydney over the second half of 2011, with notable falls recorded Toorak, a suburb synonymous with wealth and prestige.
AMP senior economist Dr Andrew Wilson says the Melbourne prestige market has been “very soft”, with top-end buyers very scarce at the moment.
“There was some activity towards the end of the year, but this was mainly from bargain hunters – there is good value to be had,” he says.
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Toorak recorded 92 sales over the period with a median price of $1.2 million while Malvern was also a notable prestige suburb to suffer a major house price correction, with its median sales price dropping 31% to $1.085 million from 73 sales during this period.
Most tellingly, Sydney has 52 prestige suburbs with higher median than Toorak. The list is topped by Bellevue Hill in the eastern suburbs, which has a median of $3.3 million from 39 sales.
AMP senior economist Dr Andrew Wilson says there were enough sales in Toorak for the result not to be a “statistical blip”.
“Toorak is traditionally a prestige cachet suburb, but it actually has a mixed profile in terms of price disparity and has some lower-priced properties,” he tells Property Observer.
The top ranking Melbourne suburb was Canterbury – 10 kilometres east of the CBD – which has a median sales price of just under $1.7 million achieved from 54 sales.
The fact that Canterbury ranks at the top reflects the quiet state of the market, Wilson says, because it has always ranked “second or third in terms of prestige”.
However, he says Canterbury is home to Melbourne’s “golden mile”, an area incorporating oak tree-lined Monomeath Avenue, whose residents have included the Minogue family, race car champion Mark Eddy and Andrew Peacock, former leader of the Liberal Party.
One of the strongest-performing prestige suburbs over the six-month period was Albert Park, a few kilometres south of the CBD and well known for its heritage buildings and terraced houses.
Albert Park ranks second on the list of prestige suburbs with a 35% gain in the second half of 2011 to a median of $1.55 million.
The bayside suburb of Brighton remains the most popular among prestige buyers, recording 151 sales during the second half of 2011, with the median sales price rising 18% to $1.22 million.
Looking at Sydney, Wilson says most prestige suburbs in the top 20 recorded price falls over the six-month period.
Among those to suffer big price falls were Palm Beach, where the median price fell 26%, and Mosman, where prices fell 10%.
Looking ahead, Wilson expects a slow recovery at best for the prestige market.
“One of the positive things has been the stock market, which has been building solid base with incremental increases.
“It’s a key signal for prestige market, but there is a long way to go.
“We won’t see aspirational buyers until the third or fourth quarter, and we won’t see the kinds of prices we have seen in the past.”