Australia’s property market has experienced a significant shift in lower-end priced properties, as rising capital city house prices has seen the number of properties under the $400,000 mark diminish.
According to CoreLogic RP Data analyst Cameron Kusher, homes selling at a price below $400,000 are now down to 39.7% of all sales, from 44.1% a year earlier.
Over the 12 months to August 2014, 37.3% of houses and 45.7% of units sold for less than $400,000. At the same time a year earlier, 42.3% of houses and 48.5% of units sold for less than $400,000.
Hobart has the highest proportion of all house sales below $400,000, with 62.8% of homes still selling for less than that amount. This is followed by Adelaide (47.9%) and Brisbane (32.4%). Canberra has the lowest proportion of all house sales below $400,000, with just 7.5% of homes selling below that mark. The Sydney housing market recorded 12.1%.
“Twenty years ago, more than 9 out of every 10 house sales across each capital city were below $400,000. Of course over that time wages have increased, interest rates have tended to be much lower and credit has become much more freely available. Nevertheless, the drop in affordable housing across most capital cities has been substantial,” Kusher said.
Looking at apartments, Hobart also had the highest proportion of all apartment sales below $400,000, with 82.9% of apartments selling for less than $400,000. Like house sales, this was again followed by Adelaide (67.8%) and Brisbane (53.8%). Sydney has the lowest proportion of all apartment sales below $400,000, with 23.5% of apartments selling below that mark. The Melbourne apartment market recorded 37.3%.
“Again 20 years ago almost every unit sold was less than $400,000. While there has been a decline in unit sales under $400,000 across the board it has been markedly larger in markets like Sydney, Melbourne, Darwin and Canberra,” Kusher said.
“Options for affordable housing supply, particularly in cities such as Sydney, Melbourne, Perth, Darwin and Canberra have sharply reduced over the past two decades.
“Although borrowing for a mortgage has become easier and wages have grown, the supply of lower priced homes drives many lower income earners out of ownership in these cities.”