The number of Australian suburbs with median house or unit values of $1 million or more has reached an all-time high.
CoreLogic found that 29.3 per cent of the 4,772 suburbs analysed recorded a current median value at or above $1 million, up from a recent low of 21.7 per cent in January 2023.
CoreLogic Economist Kaytlin Ezzy the increase in million-dollar markets is a natural consequence of rising property values and worsening affordability.
“At the onset of COVID, just 14.3 per cent of house and unit markets had a median value at or above the $1 million mark,” Ms Ezzy said.
“With almost 30 per cent of suburbs now posting a seven-figure median, the increase is a natural consequence of rising values and worsening affordability.”
Ms Ezzy said that Sydney continues to dominate the million-dollar market list, despite growth favouring mid-sized capitals over the past year.
“Sydney recorded the highest net rise in million-dollar markets over the year, with 46 new entrants,” she said.
Brisbane also saw a significant increase, matching Sydney with 46 new million-dollar markets.
Ms Ezzy said this growth was due to positive interstate migration and a continued undersupply of housing stock.
“Such a significant increase in home values has eroded much of the city’s previous affordability advantage, with Brisbane now having the second highest median dwelling value among the capitals,” she said.
Perth ranked third with 35 new entrants and one re-entrant to the million-dollar club over the year, despite its relatively low starting point.
Ms Ezzy said that while the pace of growth has started to ease, it’s unlikely we’ve seen the peak in the number of million-dollar markets.
“As of August, there are 24 suburbs with a median value above $990,000 currently recording positive quarterly value growth,” she said.
“It’s likely we’ll see a number of these markets cross the million-dollar threshold within the next few months.”
However, Ms Ezzy warned that affordability concerns are growing, with borrowers dedicating more of their income towards servicing their mortgages.
“With an $800,000 loan balance and the current average variable mortgage rate for new owner-occupiers, a household would need an annual income close to $200,000 to keep repayments on a $1 million home under 30 per cent of their income,” she said.
