Hot on the heels of the RBA’s acknowledgment of the epic hyperinflation of Australia’s residential land values, which has come at the expense of younger (and future) Australians, Core-Logic RP Data has released new research revealing that 437 Australian suburbs now have a median house price of $1 million or more:
Across the nation the 437 suburbs to make it to millionaire’s row is a record result and represents an increase of 23.1% from the previous year following a 44.3% rise in the number of million dollar suburbs between 2013 and 2014.
According to head of research Tim Lawless, the rise in the number of suburbs with a median value of at least $1 million comes off the back of an 11.1% rise in combined capital city home values over the past twelve months. “The rise in values has been strongest in Sydney and Melbourne and the jump in the number of suburbs on the list is evidence of these strong value rises,” he said…
By way of the total number of suburbs with a $1 million median value or greater, the results are as follows:
• NSW had the greatest number of suburbs at 302, up from 232 the previous year. NSW’s share of suburbs with a median value of $1 million or higher is also rising quite sharply. In 2010 57.6% of $1 million suburbs nationally were in NSW, the proportion has now lifted to 69.1%.
• With 61 suburbs, Vic is the state with the second highest number of suburbs with a median value in excess of $1 million and far less than NSW’s number.
• Elsewhere the proportions of national $1 million suburbs are: 14.0% in Vic, 3.2% in Qld, 2.7% in SA, 8.9% in WA, 0.0% in Tas, 0.5% in NT and 1.6% in ACT.
Of the 437 suburbs with a median value of at least $1 million over the past year, 427 or 97.7% of suburbs were located in a capital city. There were also significantly more suburbs making the list for houses (424) than units (13). Mr Lawless said, “In fact, all of the suburbs listed for units were situated in Sydney and were located adjacent to or on the water,” he said.
While the number of suburbs with a median value of at least $1 million has risen sharply over recent years, CoreLogic RP Data also recorded a sharp rise in suburbs with a median value of at least $2 million. In June 2014, 32 suburbs had a median value in excess of $2 million and this figure has now increased to 48 suburbs. Of these 48 suburbs, 40 are in Sydney, 5 are in Melbourne, 2 are in Perth and 1 is in Canberra.
“With dwelling values continuing to trend higher, particularly in Sydney and Melbourne, we anticipate that the number of suburbs with a median value of more than $1 million will expand further over the coming year.
As noted by the RBA’s Phil Lowe in the afore mentioned speech:
“From the perspective of society as a whole, much of what is gained [from high land prices] on the one hand is lost on the other… There are windfall gains from higher land prices but everyone pays more for housing services”.
“…with the existing owners of dwellings receiving capital gains when land prices rise… [there is an adverse impact on] the distribution of wealth across generations, with the current owners of dwellings earning capital gains but future generations paying higher housing costs”.
QED.
