How things have changed over the last decade:
In 2006, there were just five suburbs in Melbourne’s million dollar club:
- East Melbourne,
- St Kilda West and
Now there are 89!
Domain Group chief economist Dr. Andrew Wilson said the $1 million median was no longer a prestige market indicator and more of a mid-market, interest rate-sensitive price.
“If we’re looking at the prestige market benchmark, maybe we should be looking at a $2 million median,”
“It is quite remarkable the acceleration in the number of million dollar suburbs in the past few years. That’s not just price inflation, it is also the fact that price range is more amenable to a larger proportion of buyers.”
Dr Wilson said the number of areas with million dollar medians would continue to spread from central Melbourne into the western and northern suburbs taking up vast swaths of Melbourne’s east.
And almost half of them are relatively new entries to the list, having only joined the club’s ranks in the past two years.
Click a year to see which suburbs passed the $1 million threshold
The chart above shows how until 2014, the red areas on the map had not changed much.
The suburbs formed a continuous band that extended down from Kew before tracking along Beach Road as far south as Beaumaris.
But in 2015, the surge of buyer activity around Box Hill, Glen Waverley and Mount Waverley propelled those areas over the million threshold.
Average property prices now sit on about $1.2 million in these suburbs, driven, demographer Bob Birrell says, by locals and an “Asian plutocratic class” competing for the best housing stock in the inner east.
Dr Birrell said the map showed “a major group of gainers and a major group of losers”, with the losers excluded from areas that have the best access to public transport and top public schools.
Some further thoughts:
Of course these figures don’t account for inflation, so once adjusted for inflation, 49 suburbs, not 89, would qualify under 2006’s equivalent $1 million threshold.
Clearly owning property – your own home and investment properties is the way to wealth in Australia.
But not every property is an investment grade property
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Source: Domain – Dashboard and interactive map by Craig Butt