Australians prefer to buy middle of the range homes with a median price less than $600,000, new research has revealed.
According to RP Data, over the year to August 2012 almost four in five home sales were below $600,000.
“Over the past year, almost half of all house and unit sales in Australia were transacted at prices less than $400,000, while only 5.4 per cent sold for more than $1 million,” RP Data’s Cameron Kusher said.
Properties that sold for between $200,000 and $400,000 accounted for a majority of sales; this price bracket accounted for 41.2 per cent of sales over the year.
Property sales between $400,000 and $600,000 accounted for 30.4 per cent of all sales over the year, while the $600,000 to $800,000 price bracket represented the third largest segment, at 11.2 per cent. An interesting point raised by Mr Kusher in the analysis was that sales over $1 million accounted for only 5.4 per cent of all sales compared to 7.1 per cent of sales at prices below $200,000.
At the capital city level, the results tell a different story from those in the nation's other markets, with 34.9 per cent of sales in this market occurring between $400,000 and $600,000.
In the same capital city markets, home sales at prices in excess of $1 million accounted for just 7.4 per cent which is much higher than across the nation.
Throughout Australia, 48.3 per cent of all homes sold were at prices below $400,000. Within the combined capital cities, just 37.2 per cent of all sales were at a price under $400,000.
Australia’s two most affordable cities, Adelaide and Hobart, had the greatest proportion of homes that sold for under $200,000, at 6.3 per cent and 12.9 per cent respectively.
In Sydney, Melbourne, Perth, Darwin and Canberra, the greatest proportion of sales over the year have been for properties priced between $400,000 and $600,000.
Within the remaining cities, homes priced between $200,000 and $400,000 accounted for the largest proportion of sales.
Looking into total sales activity below $400,000 across all of Australia, Mr Kusher confirmed that the regions with the greatest proportion of sales below this benchmark are all rural areas and are generally located away from the coast. These areas also have relatively low populations.
Mr Kusher added that the regions that have the lowest proportion of home sales below $400,000 are typically either capital city markets, coastal or those linked to the mining and resources sector - most of which have much higher population bases and therefore relatively strong demand for housing.
“The good news is that across most regions at least 30 per cent of home sales over the past year have been at prices below $400,000, highlighting that there remain opportunities for price-sensitive purchasers,” he said.
“These opportunities, particularly in capital city and coastal markets, are more prevalent in the unit market or within the outer suburbs where property prices tend to be lower.
“Clearly, it will be a stretch for buyers on a below-average wage to enter into most capital city housing markets. An option for a buyer in this particular group may be to choose to look outside the capitals and focus on more affordable options such as units, or [consider] purchasing with a partner.”