Real estate market in Australia saw its strongest growth in the year 2013 over the last four years. House prices rose by 9.48% during 2013 in the eight major cities of the country. As per agents too, with growth of 65 per cent in sale of local properties worth more than $1 million, over last 12 months the confidence in the property market has returned. St Peters and Norwood were the best suburbs with 18 and 15 million dollar plus sale respectively.
One view is that stable interest rates and the new Federal Government have proved instrumental in restoring public confidence. Whereas, a few people also believe that the interest rates do not have a direct impact on property sale over $1 million, so it’s only the restored confidence in the market that is driving. Experts say that recovery in property prices and vendor confidence is also visible. With more and more families looking for bigger properties $1 million property, is no longer looked up as a possession of the upper class. Of course, this increased demand is also letting to an increase in prices of these properties.
As per a recent report of CoreLogic Home value index released in January, 2015, there was an increase of 7.9 percent in home values in the year 2014. The two most expensive capital cities were Sydney and Melbourne. Same trend was reflected in the auction market. Also, where there was a rise in auction clearance rates.
If viewed separately each Capital City varies across the price brackets. Houses in $200,000- $400,000 price bracket recorded the highest number sale in Adelaide and Hobart while in Sydney the highest sold price bracket was $1 million- $2 million.
Beyond all doubts, the Sydney property market is booming. In the year, 2014 median price for detached houses in Sydney touched $1 million for the first time ever. Experts say or rather believe that the low- interest rates have led to this increase in number of investors in the market which further has caused an increase in prices. Northern Sydney is presumed to be populated by the rich snobs. This presumption is backed by the fact that house prices in North Sydney are skyrocketing. The average prices of a house here is over $1.5 million. In western Sydney, although the median price is between $700,000- $900,000, certain suburbs like Baulkham Hills command a price of over $1 million.
In eastern Sydney, most properties are row flats. Average house price here is still on a higher side with an apartment pricing more than $1.5 million on an average. Comparatively the Sutherlands have lower average house prices. Here an apartment may cost around $500,000.
The $ 1 Million Club in Melbourne is also in the growth phase. In year 2010, there were 34 suburbs in Melbourne at a median house price of $1 million. The prices fell post that time and currently eight suburbs are out of that list. Again in 2014 there was rebounding in the city’s property market with two new entrants to the club: Caulfield and Malvern East. In the year 2013, Princes Hill saw the biggest jump of 26.6 per cent in median house price.
As per reports of Real Estate Institute of Victoria, Toorak was the first city in Melbourne to hit a million-dollar price on an average in the year 2000. Other blue-chip areas like Kooyong, Canterbury, St Kilda West, Armadale, East Malvern and Kew are already a part of the million dollar club with a median price of more than $1.5 million.
As per experts in the current scenario, a million dollar would not buy a decent house in lot of suburbs of Melbourne especially for a big family. For example, in Yarraville spending $1 million might entitle you to a renovated, double front house with 2-3 bedrooms but in Moonee Ponds same amount will only fetch an unrenovated double-fronted house.
2014 saw an explosion in the number of suburbs with value in excess of $1 million. Darwin’s suburb Larrakeyah has been marked as the most expensive suburb of houses with a median house value of more than $1.5 million. It ranked 16th position on the national list of suburbs with the highest median house values.
A magnificent 10.2 percent growth was experienced in the capital city in just 12 months. This growth further led to an increase in the cost of housing and subsequently a significant increase in the number of suburbs with a median value of $1 million or more. Many experts claim that Darwin had the biggest increase in the number of million dollar suburbs over the past year.
Although the rates of housing exceed $5 million in most of the regions of Darwin yet there were many sales that were restricted to $1 million offering five-bedroom home with high ceilings and granite benchtops.
Hobart is relatively a cheaper city that offers the maximum amount of space. It is the only capital city that is not predicted to reach $1 million in the coming years. As per the expert, the cost of housing in Sydney could even push beyond the $1 million mark but it is difficult for capitals like Hobart to reach such levels and is likely to continue at the same pace.
The main reason for the low cost of housing in Hobart, especially in Tasmania, is the rising unemployment and flagging economic growth, which has affected demand in the housing market and weakened prices since 2010. A house featured with arched hallways, high ceilings with classic lace works; wraparound verandah asks a price of $1.050 million.
In the early months of 2013, a 1041-square metre 1880 sandstone cottage with views across the Derwent River, with a cellar, a study and a formal dining and reception rooms was sold for around $1 million after sitting on the market for about 4 months.
Housing in Perth has seen a significant rise in the recent years. In the year 2014, eight Perth suburbs have reached million dollar median prices, showing that demand and desirability can create property hotspots in all market conditions.
While the number of suburbs is on a rise, the Perth property market has been “pretty moderate” in terms of price growth. Cities in and near Perth were experiencing the maximum activity. Cities like Coolbinia, Mount Lawley and North Beach rose up the median price rankings.
Ellenbrook, Huntingdale, North Lake, Piara Waters, Pickering Brook and Wandi are the six main Perth suburbs that have become million-dollar neighbourhoods for the first time in the past year, notching up property sales over $1 billion. The overall growth pulled more suburbs in the million dollar club as the sales of $1 million to $2 million increased from 6.7 to 8.2 per cent for houses and from 3.3 to 3.4 percent of apartments.
Brisbane has experienced a lot of change in premium housing market over the past decade. Many suburbs have maintained their iconic status while others have come and gone. Studies of 2004 show that there were over 360 houses sold over $1 million in Brisbane. The number has almost tripled itself in the year 2014 reaching over 1250 sales.
Maximum sales have been seen in Paddington and Bulimba as buyers prefer village lifestyles and authentic retail offerings. The consumer’s demand has been mainly driven by local coffee shops, cafes and specialized boutiques.
Brisbane has made the strongest recovery from the first quarter of 2012 to the third quarter of 2014 by increasing the volume of sales by 1.5 per cent. With an average worth of $2 million or more, there are all in all 42 suburbs with best locations and views.
As compared to Sydney, Perth or Darwin, a million dollar can buy a much better property in Adelaide. An apartment with three bedrooms, five bathrooms comes at a price of $1.05 million in Adelaide’s CBD. Also in the north of Adelaide’s a new 256 sqr metre home is worth $1 million. A million dollar can buy an ultra-modern three bedroom townhouse just 10 minutes from the city.
In the heart of the Canberra city, $1 million is worth a luxury townhouse. Whereas, just a twenty minute drive away from the city $ 1 million can buy a four bedroom and four bathroom mansion in Jerrabomberra.
Thus, the most expensive capital city in terms of property is Sydney. Price paid to buy a property in Sydney can buy two in other capital cities like Brisbane and Melbourne. With slow growth in rents in the cities, Australia’s property market is expected to flourish for a good time to come.