Over 250 Aussie markets lose million-dollar status

CoreLogic’s latest Million Dollar Market report showed 988 of the 4,436 house and unit markets analysed in May had a median property value of $1 million or more, down from 1,243 at the same time last year.

Data showed Sydney saw the largest decline in suburbs falling below the seven-figure mark, with 78 house and unit markets falling below the threshold. Regional NSW came in second, with 47 markets dropping below $1 million.

CoreLogic economist Kaytlin Ezzy said it was unsurprising to see the NSW capital city top the list, given it recorded the largest peak-to-trough decline in values of -13.8 per cent.

“While declines across Sydney’s more expensive markets were some of the largest across the country, many of these markets had a relatively high starting point allowing them to retain the seven-figure price tags,” she said.

She pointed out that the prevailing trend among suburbs with property values below $1 million is centred in the more affordable locations within Sydney’s outer mortgage belt and fringe areas.

“Despite recording smaller declines, it’s these suburbs where median values have dropped below the million-dollar threshold,” she added.

Nationwide, the Home Value Index experienced its most significant drop on record, plummeting by 9.1 per cent from April 2022 to February 2023.

And while there has been a modest 2.3 per cent increase in values over the past three months, they still remain 6.9 per cent below the peak.

Further examining the markets where property values dipped below the seven-figure mark, a total of 237 house markets and 19 unit markets experienced median values falling below $1 million in the past year.

Notably, Perth was the only area to buck the downward trend across the country, with the number of million-dollar markets holding steady.

“Values across Perth were fairly resilient though the recent downswing due to its relative affordability, low listings levels, and tight labour market, which helped push values to a new high in May,” Ms Ezzy explained.

Burns Beach, a coastal suburb located 34 kilometres north of Perth’s CBD, was the lone new entrant to the exclusive club, now touting a median price of $1.033 million.

“With a prime beachfront location, marine park, and popularity among families, house values in Burns Beach rose 4.1 per cent over the year, to become Australia’s newest million-dollar market.”

In Queensland, the number of million-dollar markets in Brisbane also dropped, with 41 falling below seven figures, while 23 markets in the regional areas of the Sunshine State followed suit.

Even the highly popular Sunshine Coast and the Gold Coast regions were not spared from the downturn, as the coastal areas saw 13 and 10 markets falling out of the $1 million market, respectively.

The same trend was observed in other sought-after lifestyle markets. In regional NSW, areas such as Newcastle and Lake Macquarie experienced a decline of 12 markets, while the Illawarra region witnessed a decrease of five markets. Additionally, the Southern Highlands and Shoalhaven regions saw a similar story with a decline of seven markets.

“These regions benefited greatly through the COVID upswing, with flexible working arrangements, lifestyle benefits, and relative affordability, all of which made them attractive option for buyers,” Ms Ezzy said.

She explained the COVID-19 surge in values also made these markets more sensitive to the rising cost of debt, with many recently minted million-dollar suburbs falling below the seven-figure mark.

In Melbourne, 30 markets were removed from the million-dollar club, while in regional Victoria, 11 also failed to retain their status, including Portarlington on the Bellarine Peninsula.

In the ACT, data showed 15 house and unit markets saw median values fall below $1 million. Meanwhile, Tasmania’s market members in the upper end club was whittled down to just two — Sandy Bay and Tranmere — after six house markets dropped below $1 million.

Lastly, house values in four suburbs across Adelaide dipped below seven figures.

But despite the decline in the number of million-dollar markets across Australia, Ms Ezzy noted the portion of properties selling for $1 million or more has actually held fairly steady over the year to March at almost one in four properties — indicating high-end buyers are still active in the market.

However, the economist acknowledged the trajectory of the country’s cash rate, which rose to a 12-year high of 4.1 per cent in June, will have an impact on the performance of million-dollar suburbs.

“Historically, increases in the cash rate have put downward pressure on market values and many economists and banks have lifted their forecast for where rates might peak following June’s increase.

“It’s likely this will delay the return of some house and unit markets to the million-dollar club,” she concluded.