One hundred and sixty-nine (169) suburbs in Australia have lost their million-dollar status, while only seven suburbs have grown in value to $1 million or more, a new CoreLogic report shows.
CoreLogic recently analysed suburbs across the capital cities and regional areas of Australia for its Property Pulse report on million-dollar markets and found that many of the more affordable outer-ring suburbs in Sydney and Melbourne had stopped recording a seven-figure median value.
While home values across the market have generally been trending lower, including regional areas and affordable homes, CoreLogic observed that the more expensive areas were going down at a higher rate, with home values in the most expensive quarter of the market falling faster than the rest.
CoreLogic research director Tim Lawless (pictured above) said that many of the outer-fringe suburbs that fell below the million-dollar mark previously showed median values only slightly above $1m.
“[So] in many cases, a small percentage drop in value has been enough to push values below $1 million,” Lawless said, although he added that most suburbs would still need to see their values fall ‘significantly further’ before their medians dipped below the seven-figure threshold.
On a national scale, 836 suburbs still hold a median value of at least $1m. Sydney registered the greatest number of million-dollar suburbs (347), followed by Melbourne (117). These were the only capitals that saw a dip in the number of million-dollar suburbs compared to October last year, Lawless said.
Sydney home values decreased 8.6% over the 12 months leading to October this year but this figure rose to more than 10% when comparing prices to their peak value in February. Melbourne home values decreased by 5.6%. While Hobart was the only other capital to register an annual decline in home values (-1%), the decline has not been enough to result in fewer million-dollar suburbs than the capital had the previous year.
Despite the bleak results, Australia reported over twice the number of suburbs with million-dollar median values than it did in March 2020, when the pandemic had just begun and there were only 393 million-dollar suburbs. The same could be said of all capitals and state areas, including Sydney and Melbourne, which registered only 257 and 85 million-dollar suburbs respectively when the pandemic started.
The seven areas to be welcomed into Australia’s million-dollar club are Adelaide’s Forestville and North Brighton; Perth’s Burns Beach and Alfred Cove; Bright in Victoria and NSW’s Emerald Beach and Bonny Hills.
Lawless also noted that the rate of decline in Adelaide had picked up since July.
“Adelaide’s rate of decline has become more pronounced across the upper quartile, where values are down 2.6% since peaking a month earlier in June,” he said. “With this weaker trend across the more expensive end of the market, its likely we will see some ‘borderline’ million-plus suburbs starting to slip below the million-dollar mark over coming months.”
With a seventh rate-rise imminent in December, Lawless said the decline in million-dollar suburbs “simply [reflected] the weaker housing market conditions” and he expected the trend to continue.
“The trend over the past few months has been towards an easing in the rate of decline, especially in Sydney and Melbourne, so if that trend persists we may not see an acceleration in the number of suburbs where the median value drops below $1 million,” he said.
