A record number of Australians spent $1 million or more to secure a home in the past year, according to new CoreLogic data.
CoreLogic’s annual Million Dollar Markets report has revealed that just under a quarter (23.8 per cent) of the 596,733 home sales that took place over the year to March 2022, went for more than $1 million.
The figure marks a new record proportion of homes over seven figures, with the previous record being 23.4 per cent (set in the 12 months to February).
The most recent sales transaction figures are also up on previous figures, rising 19.8 per cent from the 497,923 sales seen in 2021.
CoreLogic has also released new data around property values for the year to May.
It found that, in the year to May, an additional 487 markets – comprised of 450 houses and 37 unit markets — joined the million-dollar club.
In total 1,367 or 30.4 per cent of house and unit markets analysed in May recorded a median value of $1 million or more.
According to CoreLogic research analyst Kaytlin Ezzy, the country’s bullish economic and property run in the latter part of 2021 has driven both the volume of home transactions and the proportion of million-dollar sales to hit new record highs.
“High consumer sentiment, tight advertised supply, and low-interest rates fuelled strong home value growth throughout 2021, resulting in a new record high annual growth rate of 22.4 per cent over the 12 months to January,” Ms Ezzy said.
But while almost all capital cities and the rest of the state areas have enjoyed strong growth on an annual basis, the analyst highlighted that there is now a divergence in the growth conditions across the country.
“Since January, dwelling values across Sydney and Melbourne have started to decline, while values have continued to rise across South Australia and Queensland. More recently, Canberra, which had previously recorded many months of consecutive growth, recorded its first falls in dwelling values in some years in May,” Ms Ezzy explained.
Sydney leads property million-dollar pack
The report showed Sydney was home to 26.3 per cent of the new million-dollar markets during the 12-month period to May.
Data showed that 448 house and 104 unit markets in the NSW capital are now part of the prime real estate club, indicating an increase of 26.6 per cent from last year.
Ms Ezzy described the figures as “unsurprising”, given the city’s median dwelling value has sat above $1 million since May 2021.
“While the largest concentration of new million-dollar markets in the city’s South West, Outer South West and Central Coast, Sydney’s million-dollar markets are fairly widespread, with more than half of all Sydney sales over the 12 months to May transacting at or above $1 million,” she said.
In Melbourne, 212 house and 11 unit markets had a median value at or above $1 million in May, the majority of which were located across Melbourne’s inner (39), inner south (42), inner east (30) and outer east (30).
Brighton, located in Melbourne’s inner south, was the standout performer in the Victorian capital during the period. The suburb recorded the highest median sale price across the city at $3,778,312. Over the year to May, 34.6 per cent of sales in Melbourne had a price of $1 million or more, up from 26.5 per cent in the same period last year.
More small city, regional markets join million-dollar club
Despite the smaller capitals lagging behind Sydney and Melbourne in terms of dwelling value growth on an annual basis, CoreLogic reported strong increases in the number of new entries in the million-dollar club coming from Brisbane, Adelaide, Perth, Hobart and the ACT.
In Brisbane, the number of million-dollar markets more than doubled, rising by 139.2 per cent over the year to May. Regional Queensland also saw a 139.2 per cent increase in million-dollar suburbs compared to the same period last year.
According to the report, Queensland’s relative affordability and strong interstate migration underpinned a surge in values, with Teneriffe maintaining its position as Brisbane’s most expensive house market at ($2,873,947).
Adelaide also doubled the number of its million market members, reporting 79 markets with a median house value of $1 million or higher during the period. Over the year to May, 13.0 per cent of sales recorded a sale price at or above seven figures.
Unley Park maintained its position as Adelaide’s most expensive house market, with a current median value of $2,129,770, indicating an increase in the average value in the suburb by around $420,000 from the year prior.
In Perth, 56 markets made the million-dollar list in May, up from 43 the year prior.
Data showed that nine out of the Western Australia capital’s top 10 most expensive house markets were located in the city’s inner region, where Dalkeith recorded the highest median value at $2,965,588.
Hobart also welcomed new members to the property trophy club. Over the 12 months to March, 19.3 per cent of sales across the Tasmanian capital had a sales price at or above $1 million, up from 8.3 per cent last year.
The house market in Sandy Bay recorded the highest median value across the city in May, at $1,402,803, followed by Acton Park at $1,316,329.
Meanwhile, no markets across regional Tasmania recorded a median value of $1 million.
In the ACT, 52 house markets made the million-dollar list in May, more than twice the 28 recorded in the year prior.
And while no unit markets in the territory made the list, it should be noted 62.7 per cent of ACT’s house markets have now entered the high-end market segment.
Meanwhile, the portion of million-dollar sales in the ACT rose over the year to May, increasing from 16.0 per cent in 2021 to 28.9 per cent in 2022.
And with the country’s housing market shifting into first gear – marked by the first decline in national property values in May since September 2020 – Ms Ezzy expects that high non-discretionary inflation coupled with rising interest rates will likely see household budgets tighten in the coming months, further dampening housing demand over the medium term.
“As the market moves into the downward phase of the cycle it’s likely a number of the recent entrants to the million-dollar list will see their median values decline below the $1 million mark,” she said.
However, she added that the days of prospective high-rolling property owners are not yet numbered, as more Aussies reach record-high household wealth in the latest quarter.
“Despite this, Australian household wealth hit record high levels at the end of the March quarter, driven by continued strength in the housing market largely driven by gains across the real estate sector,” Ms Ezzy stated.
Recently, the Australian Bureau of Statistics (ABS) has reported that the total household wealth held by Australian residents increased by a total of $173 billion in the March quarter, reaching a record $14.9 trillion. Wealth per capita similarly hit a high of $574,807.