As the demand for Australians to own their own home is as strong as ever, it is becoming increasingly difficult to achieve that result especially for the low to medium income first home buyers.
Information available from CoreLogic RP Data shows that at the end of 2016, 7.6% of suburbs nationally had a median house value under $200,000, and 5.9% of suburbs had a median unit value below $200,000. To put these figures into perspective, 11.4% of suburbs had a median house value of at least $1m and 3% of suburbs had a median unit value of at least $1m. The data shows that there are more Sydney suburbs with a median house value of at least $2m than there are houses with a median value of less than $600,000.
Over the span of the past five years to the end of 2016, a substantial decline has occurred in the proportion of suburbs with a median value below $400,000.
2011 53% of suburbs had a median house value of less than $400,000
69.8% of suburbs had a median unit value of less than $400,000
2016 41% of suburbs had a median house value of less than $400,000
53% of suburbs had a media unit value of less than $400,000
Reviewing data on the individual capital cities over the past five years highlights the rise in property values nationally, particularly in Sydney and Melbourne.
Five years ago, with the exception of Darwin and Canberra, every capital city had at least 20% of its suburbs with a median house value of less than $400,000. In comparison, at the end of last year, it was virtually impossible to find houses for less than $400,000 in Sydney, Canberra, and Darwin with less than 7% of suburbs in Melbourne having a median house value below $400,000.
Mr Kusher from CoreLogic RP Data stated “we noted that across each city there has been a substantial decline in affordable housing over the past year despite the fact that outside of Sydney and Melbourne there has been only moderate value growth over the period …… even units recorded a fairly substantial decline in the proportion of suburbs with a median value of less than $400,000 over the past five years.”
The data highlights the bracket creep that has occurred over the housing growth cycle, and how housing affordability in NSW (Sydney) and to a lesser degree Vic (Melbourne) has deteriorated. An increasing number of suburbs in these two states now have a median value of at least $1 million.
Given more than half of the suburbs in the million-dollar club are located in NSW, it’s no surprise that NSW dominates the list of the most expensive suburbs, with all but two of the nation’s 25 most expensive located in NSW and more specifically, Sydney.