Houses prices across Australia have a hit a record-breaking high with more than 600 suburbs now boasting $1 million median values.
According to CoreLogic, the number of million dollar suburbs has increased by 125% over the past three years.
Nearly 70% of suburbs nationwide have a median house price over $1 million, with New South Wales dominating the market.
Victoria has also enjoyed strong growth with its million dollar suburbs doubling since 2008.
On the other end, Queensland and Western Australia have experienced large declines in their proportions of million-dollar suburbs, while Tasmania sits behind as the only state yet to reach a $1 million median house price.
More than 90% of the country’s most expensive suburbs are in New South Wales, with Darling Point topping the list with a median house price of $6.4 million.
Toorak in Victoria comes in at number nine with a median of $3.8 million.
Western Australia’s Peppermint Grove also makes the top 25 with a median of $3.3 million.
Harcourts Victoria chief executive Sadhana Smiles told SmartCompany rising median house prices are to be expected.
“I’m not surprised as we see the market change and mature, interest rates go down, the election is over, people will be a little bit more confident in buying,” she says.
CoreLogic research analyst Cameron Kusher echoes the sentiment.
“While overall housing demand may be slowing a little, we expect that with historic low interest rates, demand for premium housing is set to remain buoyant over the coming year,” he said.
“Subsequently we would expect in 12 months’ time even more suburbs to have a median value of at least $1 million.”
Smiles says the affordable price range across Victoria is now around $800,000 to $1.2 million.
She is also finding that the increasing density of inner-city apartments in Melbourne has created an oversupply that is pushing prices down in the area, while suburbs such as Glen Waverley, Wheelers Hill and Mount Waverley continue to thrive.
According to CoreLogic, houses make up 93% of the million-dollar median market with only 7% of the properties being units.
In Victoria, Smiles says outer suburbs like Pakenham, Berwick and Warragul, located beyond 40 kilometres from the CBD, are starting to boom with a growing number of new homebuyers choosing to buy further out from the city to get more value for money.
“They are suburbs where people can still buy land, they can still get a decent sized house, there’s connectivity back to the city with train lines and really good infrastructure,” she says.
For people looking to invest in property, Smiles highly recommends considering the size of properties, adding that investors often make the mistake of rushing to smaller inner-city apartments.
“People still look for a good sized living space, where it’s located in terms of trams and trains, and surrounding infrastructure,” she says.
“Consider the return on investment, how many properties are going to be vacant at one time, what do you need to do to attract tenants?
“You should be looking at a 4-5% return on investment easily.”
Source: CoreLogic
Dinushi Dias is a freelance journalist and a former StartupSmart reporter and multimedia content producer. She is the co-founder of Melbourne-based production house Dinushi & Power.
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