There has been an explosion in the number of suburbs nationally with a median value in excess of $1 million over the past year.
As at June 2014 there were 417 suburbs nationally with a median value of $1 million or more, up from 312 at the same time in 2013.
Combined capital city home values have increased by 10.2% over the 12 months to July 2014 according to the RP Data Home Value Index. As a result of this robust growth we have seen the cost of housing increase and subsequently 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.
Over the past year there was a significant increase in $million suburbs, up from 311 suburbs a year ago. The number of suburbs with a $million price tag for houses has increased by 104 over the past year while for units the number is up by 5. New South Wales in particular has recorded the most substantial increases in $million 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 an -11% fall in the Australian Capital Territory. Note that Tasmania has no 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%.
It is also interesting to note the significant 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.
With mortgage rates low we are seeing a lot of activity in the market by people upgrading their home. Clearly as evidenced here a large slice of that activity is happening within the higher-end of the housing market propelling home values higher and more homes into the $million realm.
Looking at the suburbs nationally with the highest median value, it would come as little surprise that Sydney’s Point Piper remains 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. 22 of the 25 suburbs listed were in Sydney with 1 in Melbourne and 2 in Perth. Of course the significant prominence of Sydney suburbs is reflective of the expense of Sydney housing and the fact that it has recorded the greatest home value growth over the past year.
The data shows that higher values, particularly in Sydney are becoming more prevalent. With mortgage rates low and tipped to remain low we would expect that in 12 month’s 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.
While the rise in suburbs with a $million plus price tag is great for those who own a home in these areas of course 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 the $million homes are more prevalent).
Article by RP Data senior research analyst,