Australia’s million dollar property club hit new heights this year in what can only be described as an explosion in the number of suburbs nationally with a median value in excess of $1 million over the past year.
Sales data to June 2014 confirmed that there are now 417 suburbs nationally which boast a median value of $1 million or more, up from a healthy 312 for this time in 2013.
While Sydney claimed majority market share to make it to the million dollar club with 22 suburbs ranked in the top performing list out of 25, while Perth had two suburbs and Melbourne had just one.
RP Data’s July combined capital city home values index shows that values increased by 10.2% over the 12 months to July 2014. As a result of robust growth, the cost of housing has increased and subsequently, there was a significant increase in the number of suburbs with a median value of $1 million or more.
As at June 2014, there were 397 suburbs nationally with a median house value of $1 million or more and 20 suburbs for units. The 417 total suburbs with a median value of $1 million or more is the highest number over the past five years.
The number of suburbs with a million dollar price tag for houses increased by 104 over the past year while for units; the number is up by five. New South Wales in particular recorded the most substantial increases in million dollar suburbs over the past year.
The number of New South Wales suburbs with a median value of $1 million or more is up 42% over the year. Across the other states, there’s been a 24% rise in Victoria, 25% rise in Queensland, 44% rise in South Australia, 22% rise in Western Australia, no change in the Northern Territory and a -11% fall in the Australian Capital Territory. Tasmania has zero suburbs with a median value of $1 million or more.
The large rise in the number of suburbs with a median value of $1 million or more in New South Wales is reflective of the strong home value growth in the Sydney over the past year.
Over the 12 months to July 2014, Sydney home values have increased by 14.8%. Proportionately, Sydney suburbs comprise 61% of all $million plus suburbs nationally followed by Melbourne at 14% and Perth at 12%.
Of most significance from today’s million dollar findings, is the rise in the number of suburbs with a median value of more than $2 million. Last year 37 suburbs had a median value of $2 million or more while in June of this year, the number of suburbs had increased to 42.
Clearly, low mortgage rates are creating a surge in market activity. This encourages people to look to upgrading to bigger homes and in more ideal locations. We’re seeing a large slice of this activity taking place within the higher-end of the housing market and as a result, propelling home values higher and into the million dollar realm.
Looking at the suburbs with the highest national median value, Sydney’s Point Piper remains as the nation’s most expensive housing market. As at June 2014, houses in Point Piper had a median value of almost $5.7 million. Woolwich in Sydney was not far behind with a median value of $5.5 million.
Of the 25 suburbs with the highest median value, all suburbs listed were for houses rather than units. Twenty two of the 25 suburbs listed were in Sydney with one in Melbourne and two in Perth.
The results show that higher values, particularly in Sydney is becoming more prevalent. With mortgage rates low and tipped to remain low we would expect that in 12 months’ time we will have even more suburbs with a median value of $1 million or more. Although we anticipate the rate of value growth is likely to slow over the coming year, we do expect further increases.
A rise in suburbs with a million dollar plus price tag is great for those who own a home in these areas. For those that don’t, it highlights that these buyers have fewer housing options and continue to be pushed further away from the city centre where most of these homes in excess of $1 million are located.
Photo courtesy of Wikimedia Commons.
This article originally appeared on Property Observer.