The cumulative effect of rising inflation, multiple rate hikes and falling property values has caused the number of suburbs in Australia’s million-dollar club to shrink considerably in the past six months.
The median value has dropped below seven figures in 169 suburbs around the country since April, while only seven suburbs have risen above the $1 million threshold. There are still 836 suburbs nationally with a median value of $1 million or more, including 347 in Sydney and 117 in Melbourne.
CoreLogic Research Director Tim Lawless said, “We are seeing the more affordable housing markets recording smaller declines, but values are generally trending lower, just not as fast as more expensive areas.
“Many of these outer fringe suburbs that have fallen below the $1 million mark were previously showing median values that were only marginally over the seven-figure threshold, so in many cases, a small percentage drop in value has been enough to push values below $1 million.
“Housing values across the most expensive quarter of the market are actually falling faster, but most of these suburbs would need to see values fall significantly further before dragging their medians below the million-dollar mark.”
For buyers and sellers, a decline in the number of seven-figure suburbs simply reflects the weaker housing market conditions.
Mr Lawless expects the weakness to continue and, with a seventh rate rise on the cards in December, he believes it is very likely the million-dollar club will shrink further.
“It is likely values will continue to trend lower across each of the broad valuation cohorts of the market, but while the upper quartile of the housing market has led the downturn, it’s also the sector of the market that is leading the easing in the pace of declines,” he said.
“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 dollars.”
