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The Rich Are Getting Richer As High End Properties Boom

Now that the current property cycle is well underway (the market having bottomed almost 20 months ago) the prestige end of the market is performing strongly  helping the rich become…well…richer.

As you can see form the graph below the premium sector of the housing market has gathered pace over the past six months and is now showing the highest capital gains compared with the broad middle segment and most affordable segments of the housing market.

Prestige SuburbsSource: RPData.com

Dwelling values across the most expensive quarter of the capital city markets were up 6.7 per cent over the past six months (compared with 5.8 per cent growth across the broad mid-market and 4.7 per cent growth at the most affordable quarter of the market).

Similarly, premium dwelling values have risen by 10.1 per cent over the past twelve months compared with a 9.5 per cent and 7.5 per cent capital gain across the mid-market and most affordable quarter of the market respectively.

There are more million dollar suburbs

The RP Data figures for January 2014 showed that  272 suburbs now have a median price of $1 million or more compared up form 188 suburbs at the the same time last year.

Of the million dollar suburbs with a median price of at least $1 million, the vast majority  (56%) were in the Sydney property market and 20% of suburbs were located in Melbourne. These were followed by  Western Australia (12%), Queensland (6%), South Australia (3%), Australian Capital Territory (2%) and Northern Territory (0.5%).

Here is the Rich List

State Suburb Property type Median Price Jan 2014 Median price Jan 2013 Capital growth $ 12 month Growth Gross Rental Yield
WA PEPPERMINT GROVE H 3575000 2400000 1,175,000 40% 2%
NSW TAMARAMA H 2931000 2093571 837,428 40% 3%
NSW NORTHBRIDGE H 2205000 1670000 535,000 33% 3%
NSW PALM BEACH H 2179500 1662500 517,000 31% 2%
NSW GLENORIE H 1067500 599500 468,000 43% 3%
NSW BIRCHGROVE H 1625000 1170000 455,000 38% 3%
NSW ZETLAND H 1200000 755000 445,000 48% 3%
NSW ROSE BAY H 2235000 1815000 420,000 29% 3%
NSW WAITARA H 1121000 750000 371,000 49% 3%
NSW LONGUEVILLE H 2490000 2120000 370,000 17% 3%
NSW SANDRINGHAM H 1490000 1121000 369,000 35% 3%
NSW KANGAROO POINT H 2455000 2100000 355,000 20% n.a
NSW BELLEVUE HILL H 3275000 2950000 325,000 11% 3%
NSW MILSONS POINT U 1140000 832500 307,500 34% 3%
NSW ROSEBERY H 1100000 832500 267,500 32% 4%
NSW BALMAIN H 1287000 1035000 252,000 23% 3%
QLD ASCOT H 1110000 868000 242,000 23% 3%
VIC PRINCES HILL H 1190000 950000 240,000 27% 2%
NSW WAHROONGA H 1200000 960000 240,000 23% 3%
NSW GLADESVILLE H 1200000 970000 230,000 22% 3%
NSW EPPING H 1167500 941500 226,000 24% 3%
NSW DENISTONE EAST H 1080000 860000 220,000 24% 3%
NSW MOSMAN H 2300000 2100000 200,000 12% 3%
NSW MARSFIELD H 1050500 855000 195,500 23% 3%
NSW DULWICH HILL H 1041000 851500 189,500 22% 3%
SA LEABROOK H 1075000 888000 187,000 44% 3%
VIC SOUTH YARRA H 1140000 1035000 105,000 28% 3%

Source: RP Data

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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'The Rich Are Getting Richer As High End Properties Boom' have 6 comments

  1. Avatar for Property Update

    March 27, 2014 @ 9:30 am Dan

    Hi,

    Is there any measure of the ratio between natural capital growth and manufactured capital growth that affects these figures?

    Reply

    • Avatar for Property Update

      March 27, 2014 @ 9:55 am Michael Yardney

      Good question Dan

      While I don’t really know, I’d suspect most of these high end investors don’t just buy property and wait for it to increase in value – I assume they “manufacture” capital growth through renovations and property development

      Reply

  2. Avatar for Property Update

    March 27, 2014 @ 2:01 pm Lin

    Hi,
    I am going to miss your one day session in Brisbane and have read your comments ie David Koch and investing in the Sunshine Coast. My question is would buying in Brisbane suburbs return better than the Sunshine Coast in the overall investment on rental return and capital gain.
    I look forward to your comments.
    Linda

    Reply

    • Avatar for Property Update

      March 27, 2014 @ 2:59 pm Michael Yardney

      Lin

      It’s a pity you can’t make it on the weekend- we’ve got over 200 Brisbane property investors coming.

      If you’ve been following my blogs you’d know I DO NOT recommend investing in holiday locations like the Sunshine Coast or the Gold Coast, even though their markets are slowly turning.

      Stick with the 4 big capital cities of Australia, but then please be very, very selective – only 5% of Brisbane properties are “investment grade.

      Reply

  3. Avatar for Property Update

    March 31, 2014 @ 12:34 am Ivan Vasev

    Hi Michael,
    What is your advise for investing in apartment/s in Port Headland, WA. Advertised return looks great as the capital growth?
    Regards
    Ivan

    Reply

    • Avatar for Property Update

      March 31, 2014 @ 7:04 am Michael Yardney

      Ivan
      If you’ve been reading my blogs you’d know I think that a bad investment decision, especially at this stage of the property cycle.

      Strategic investors also own the type of property that will be in continuous strong demand by a wide demographic of owner-occupiers in the 4 big capital cities of Australia, because these locations are underpinned by multiple pillars of economic support and therefore values don’t fluctuate widely when times become tough.

      Reply


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