Over the course of one year, the number of house and unit markets in Australia with a median value of $1 million or more has decreased. As of May 2023, only 988 out of 4,436 markets analyzed nationally met this criteria, compared to 1,243 markets in the previous year.
Sydney witnessed the largest decline in suburbs falling below the million-dollar mark, with 78 house and unit markets experiencing a decrease in values to below seven figures. This decline is not surprising, considering Sydney also had the largest peak-to-trough decline in values at -13.8%.
Several regions in New South Wales (NSW), Queensland, Victoria, and the Australian Capital Territory (ACT) saw a decrease in million-dollar markets. Factors such as the COVID upswing, flexible work arrangements, lifestyle benefits, and relative affordability initially attracted buyers to these regions.
This time last year, CoreLogic's Million Dollar Market report featured a record number of house and unit markets at the suburb level with a median value of $1 million or more.
One year and 12 interest rate rise later, membership to the million-dollar club has become more exclusive, with many of last year's new entrants now falling below the million-dollar mark.
Between April 2022 and February 2023, CoreLogic's national Home Value Index moved through the sharpest decline on record, falling -9.1% in 10 months.
While national dwelling values have recovered 2.3% over the past three months, they remain - 6.9% below the recent peak.
As of May 2023, just 988 (22.3%) of the 4,436 house and unit markets analysed nationally had a median value at or above $1 million, down from 1,243 or 28.0% this time last year.
Two hundred thirty-seven house markets and 19 unit markets had median values fall below $1 million in the past year, while Burns Beach, a coastal suburb 34 kilometres north of Perth’s CBD, was the lone new entrant.
Sydney had the largest decline in suburbs falling below $1 million, with 78 house and unit markets recording a decline in values to below seven figures.
It was unsurprising to see Sydney top the list given it recorded the largest peak-to-trough decline in values of -13.8%.
While declines across Sydney's more expensive markets were some of the largest across the country, many of these markets had a relatively high starting point allowing them to retain the seven-figure price tags.
The trend among the suburbs where values have fallen below $1 million is in the more affordable locations on Sydney’s outer mortgage belt and fringe areas.
Despite recording smaller declines, median values have dropped the million-dollar threshold in these suburbs.
Over the year, the number of million-dollar markets in the Central Coast halved from 33 to 17, while house values in 33 suburbs across the South West (-15), Outer South West (-10) and Outer West and Blue Mountains (-8) regions fell below the $1 million mark.
A similar pattern was seen in Brisbane (-41) and across some of Regional Queensland’s commutable lifestyle markets, including:
- the Sunshine Coast and Gold Coast (down -13 and -10 respectively)
- Regional NSW markets of Newcastle and Lake Macquarie (-12),
- Illawarra (-5) and
- the Southern Highlands and Shoalhaven (-7)
These regions benefited greatly through the COVID upswing, with flexible working arrangements, lifestyle benefits, and relative affordability, all of which made them an attractive option for buyers.
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With Melbourne and Canberra dwelling values falling -9.3% and - 8.8% over the 12 months to May, the portion of house and unit markets with a median value of $1 million or higher fell to approximately 30% in May, down from 35.4% and 41.5% respectively from the same time in 2022.
Those markets to fall below $1 million in Regional Victoria included the popular tourist and lifestyle towns of Daylesford, near Hepburn Springs and Portarlington on the Bellarine Peninsula.
The -12.6% annual decline in Hobart dwelling values saw six house markets fall out of the million-dollar club, leaving just two suburbs, Sandy Bay ($1,243,407) and Tranmere ($1,023,062) with a median house value over $1 million.
House values in four suburbs across Adelaide dipped below seven figures, despite the city recording a mild 0.4% increase in dwelling values over the year.
The number of million-dollar markets across Perth held steady, with houses in Burns Beach ($1,033,741) in the city’s North West being the sole new entrant to the million-dollar club, while houses in Shelley ($998,499) in the city’s South East left the club.
Values across Perth were fairly resilient through the recent downswing due to its relative affordability, low listings levels, and tight labour market, which helped push values to a new high in May.
With a prime beach-front location, marine park and popularity among families, house values in Burns Beach rose 4.1% over the year, to become Australia’s newest million-dollar market.
While the decline in seven-figure markets might be disappointing news for some homeowners, it can be noted that many markets are still recording values significantly higher than at the start of the pandemic.
Despite the decline in the number of million-dollar markets across Australia, the portion of properties selling for $1 million or more has actually held fairly steady over the year to March at almost one in four properties, suggesting high-end buyers are still active in the market.
The cash rate will have an impact on the performance of million-dollar suburbs.
Historically, increases in the cash rate have put downward pressure on market values and many economists and banks have lifted their forecast for where rates might peak following June’s increase.
It’s likely this will delay the return of some house and unit markets to the million-dollar club.