With data for the end of financial year now available, it’s interesting to look at the number of suburbs with a median house and/or unit value of $1 million or more.
Although many of us can’t afford to own a home worth more than $1 million, it is an interesting analysis which also highlights the deteriorating affordability of housing across the country.
At the end of the 2015-16 financial year, there were 615 suburbs nationally that had a median house value of at least $1 million. This represented 10.3% of all suburbs nationally that had at least 10 house sales over the year.
Units are generally much more affordable than houses and this is reflected by the fact that 1.0% of suburbs (or 26 suburbs) nationally with more than at least 10 sales had a median value of $1 million or greater.
The current growth phase in the housing market commenced in June 2012.
At that time, just 277 suburbs nationally (4.7%) had a median house value of $1 million or more and seven suburbs (0.3%) had a median unit value of or in excess of $1 million. Based on this data, the number of suburbs with a median value of $1 million or more has increased by 122% over the current growth phase and for units it is up by 271%.
Between June 2012 and June 2016, every state and territory except for Tasmania and the Northern Territory has recorded an increase in the number of suburbs in which median house values are $1 million or greater.
At the same time, Queensland and Western Australia have each shed the one suburb they had for units in which the median values was at least $1 million. In New South Wales the number of suburbs with a median unit value of at least $1 million has increased by 420% over the period.
Focusing on houses, the number of suburbs with a median value of at least $1 million has increased over the period by: 144% in New South Wales, 142% in Victoria, 120% in Queensland, 78% in South Australia, 29% in Western Australia and 50% in the Australian Capital Territory.
New South Wales and Victoria have predictably recorded the largest increases in suburbs with a median value of more than $1 million over the period given the strength of growth in the Sydney and Melbourne housing markets.
In all other states and territories except Tasmania the number of $1 million plus suburbs for houses rose since June 2012 with the number of suburbs having fallen over recent years in Western Australia and the Northern Territory in line with the decline in home values in Perth and Darwin. These figures reiterate that even though value growth outside of Sydney and Melbourne has been moderate over recent years, demand for premium housing has been stronger.
With mortgage rates low we would expect the number of suburbs with a median value of $1 million or more to growth over the coming financial year.
This also highlights that low interest rates are contributing to deteriorating levels of housing affordability across the country.
Who’s new to the million-dollar suburbs list in 2016?
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