The number of suburbs in Australia with a median property value of at least $1m has grown by 176% in the five years prior to December 2016.
Researchers at CoreLogic have found that there was a total of 760 suburbs across Australia with a median value of $1m or more at the end of 2016. This figure has increased from 275 in 2011.
The number of $1m suburbs for houses increased from 261 to 679 (an increase of 160%) while those for units shot up from 14 to 81 (a spike of 479%).
Across the states, 70.3% of these $1m suburbs were in NSW while 16.7% were in Victoria – an increase from 60.4% in NSW and 15.3% in Victoria five years earlier.
“This year, affordability is going to become an increasing issue around the country,” Cameron Kusher, head of research at CoreLogic, told Australian Broker
. “Our view is still that we’re going to see growth in 2017 in Sydney and Melbourne and that’s going to push more suburbs into that $1m category.”
Another factor to consider is the high level of unit construction, particularly in Melbourne and Brisbane,” Kusher said.
“We’re already seeing the unit market in terms of growth lag behind houses. As more and more density comes into those inner city areas, I think it’s going to make houses more sought after and it will probably push more suburbs into that $1m median.”
While growth won’t keep up pace with that of the past five years, Australia will have more suburbs with a typical value of $1m or more in 12 months’ time, he said.
Capital cities accounted for 93.5% of all the $1m suburbs in 2011 with this figure increasing slightly to 93.6% in 2016.
Sydney alone accounted for 57.8% of the $1m suburbs in 2011 and 65.4% in 2016. These figures also rose in Melbourne which accounted for 15.3% in 2011 and then 16.4% in 2016.
While there were only 39 suburbs nationwide with a median value of $2m or more in 2011, this rose to 136 five years later (an increase of 249%). In 2016, 115 of these 136 suburbs were located in Sydney.
Outside of the two major capitals, demand for lifestyle properties has been picking up, Kusher said, meaning that more areas in regional NSW, Queensland, Victoria and Western Australia may move above the $1m threshold.
“We’re also seeing improvements in housing markets in Canberra in terms of growth so we could see some more $1m suburbs there. And although growth is pretty moderate, you might start to see more of those higher end inner city suburbs in places like Brisbane and Adelaide pushing up above $1m as well.”
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