COVID-19 and the economic downturn has done little to dampen the rise of million-dollar suburbs in Australia, new data reveals, though prices have come down more generally in the past three months.
Forty-six suburbs across the country entered the million-dollar club in the 12 months to June 2020, according to REA Group data.
Melbourne led the charge, with 24 suburbs tipping past the million-dollar median house price point, followed by Sydney with 14 and Brisbane with seven.
But median house prices in 10 suburbs fell below the million-dollar mark. Sydney and Melbourne saw four and three suburbs drop off the list respectively. This was followed by two suburbs in Adelaide and one in Brisbane.
It’s worth noting that suburbs with fewer than 30 sales in this period were excluded.
Sydney and Melbourne lead Australia’s premium property market
REA Group chief economist Nerida Conisbee said the top end of the property market has been “one of the most stable property markets during the COVID-19 pandemic”, as high-income sectors have yet to see widespread job losses.
“Over the last 12 months, more suburbs have entered the million-dollar club than suburbs that have fallen out, but there are still some opportunities to get into a premium suburb for six figures,” she said, adding that this is still possible in Brisbane and Adelaide.
Melbourne saw the greatest jump in suburbs with median prices in the seven figures, tallying 119 suburbs in the list, but Ms Conisbee said it was too early to tell how the second lockdown could impact the property market.
She added that Sydney homebuyers could find it harder to purchase a property close to the city with a six-figure budget.
“Highlighting the extreme pricing of Sydney, 15 suburbs joined the million-dollar club, now bringing the total to 209 million-dollar suburbs, and making it difficult to find an inner or middle ring suburb for under a million dollars,” Ms Conisbee said.
Why the property market is remaining stable
While national real estate prices have been edging lower in the past three months, the annual figures are still positive. Property values increased by 7.1 per cent nationally in the 12 months to July 2020, the latest CoreLogic data showed, but they fell 1.6 per cent in the three months to July.
CoreLogic’s head of research Tim Lawless said low housing stock and buyer incentives has helped protect the real estate market during COVID-19.
“Advertised supply levels have remained tight, with the total number of properties for sale falling a further 4.3 per cent in the four weeks to July 27, sitting 15.2 per cent below where they were this time last year,” he said.
“Additionally, increased demand driven by housing specific incentives from both federal and state governments, especially for first home buyers, have become more substantial.”
Ms Conisbee said housing prices have remained “stable”, despite the economic recession. She attributed this to four factors:
- High levels of stimulus.
- A stable banking system.
- Mortgage repayment deferrals.
- Relative confidence among buyers, particularly before the shutdowns.
Should you refinance your mortgage?
If real estate values have grown in your areas, it’s possible that you may have more equity in your property. With record-low interest rates, it may be a good opportunity to refinance your mortgage and pay a potentially lower interest rate.
External refinancing jumped about 50 per cent in the 12 months to June 2020, indicating many are taking advantage of the low interest rate environment.
If you’re an owner-occupier with substantial equity in your property, chances are lenders may see you as a reliable, low-risk borrower, and they may be more willing to do business with you. If you’d prefer not to move to another bank, your existing lender may also consider your request for a rate reduction.
But refinancing may not be for everyone. For instance, if you have plans to sell your property in the short to medium term, it may not be worth switching to a low fixed rate home loan.
New suburbs in the million-dollar club
|Blackburn North - $1.08m||Arncliffe - $1.105m||Samford Valley - $1.1m|
|Blackburn South - $1.101m||Asquith - $1,019,500||Bardon - $1.01m|
|Box Hill South - $1,266,666||Belmore - $1,030,500||West End - $1.05m|
|Brunswick East - $1.001m||Berowra Heights - $1.03m||Fig Tree Pocket - $1.17m|
|Burwood East - $1,084,500||Bexley - $1,251,500||Ashgrove - $1.03m|
|Chadstone - $1.01m||Glenwood - $1.04m||Clayfield - $1,092,500|
|Cheltenham - $1,035,500||Jannali - $1.11m||Grange - $1,123,500|
|Coburg - $1,027,500||Menai - $1.04m|
|Collingwood - $1.075m||Mount Colah - $1,062,500|
|Edithvale - $1m||Northmead - $1.01m|
|Flemington - $1,019,500||Picnic Point - $1.05m|
|Kensington - $1,115,500||The Ponds - $1.037m|
|Kingsville - $1,017,500||Wamberal - $1.025m|
|Maribyrnong - $1,012,500||Winston Hills - $1.022m|
|Mentone - $1,040,500||Yarrawarrah - $1,023,500|
|Mitcham - $1.02m|
|Moorabbin - $1.14m|
|Mt Martha - $1,022,500|
|Nunawading - $1,035,500|
|Preston - $1,010,500|
|Rosanna - $1.115m|
|Seddon - $1,009,500|
|Vermont - $1.02m|
|Wantirna South - $1,029,500|
Source: REA Group. Data is for the 12-month median price for houses, based on at least 30 sales in a suburb.