More than 250 house and unit markets have dropped out of the million-dollar club nationally, with Perth the only capital city not caught up in the downward spiral.
According to the latest CoreLogic Million Dollar Market report, just 988 of the 4436 house and unit markets analysed in May had a median value of $1 million or more, down from 1243 at the same time last year.
Sydney saw the largest drop in suburbs falling below $1 million, with 78 house and unit markets falling below the magic mark.
Regional NSW came in second, with 47 markets dropping below seven figures.
CoreLogic Economist Kaytlin Ezzy said it was no surprise to see Sydney top the list given it recorded the largest peak-to-trough decline in value 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.
“The trend among the suburbs where values have fallen below $1 million is in the more affordable locations on 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.”
Across the country, the Home Value Index recorded its sharpest decline on record, falling 9.1 per cent between April 2022 and February 2023.
In the past three months, values have lifted 2.3 per cent, but still remain 6.9 per cent below the peak.
Mz Ezzy said 237 house markets and 19 unit markets had median values fall below $1 million in the past year, while Burns Beach, a coastal suburb 34 kilometres north of Perth’s CBD, was the lone new entrant.
In fact, Perth was the only suburb to buck the downward trend, with the number of million-dollar markets holding steady.
Burns Beach joined the million-dollar club with a median of $1.033 million, while houses in Shelley, dropped below $1 million with a median value of $998,499.
“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 said.
“With a prime beach-front location, marine park and popularity among families, house values in Burns Beach rose 4.1% over the year, to become Australia’s newest million-dollar market.”
The number of million-dollar markets in Brisbane also dropped, with 41 falling below seven figures, while in regional Queensland, 23 markets followed suit.
Ms Ezzy said this included the Sunshine Coast (down 13) and the Gold Coast (down 10).
In regional NSW markets of Newcastle and Lake Macquarie (down 12), Illawarra (down 5) and the Southern Highlands and Shoalhaven (down 7) it was a similar story.
“These regions benefited greatly through the COVID upswing, with flexible working arrangements, lifestyle benefits, and relative affordability, all of which made them attractive options for buyers,” Ms Ezzy said.
“However, the COVID 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 dropped out of the million-dollar club, while in regional Victoria 11 did the same, including Portarlington on the Bellarine Peninsula.
In Canberra, 15 house and unit markets dropped below $1 million, while in Tasmania, six house markets fell out of the million-dollar club, leaving just two suburbs – Sandy Bay and Tranmere – with a median value of seven figures.
House values in four Adelaide suburbs dropped below $1 million.
“Despite the decline in the number of million-dollar markets across Australia, 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, suggesting high-end buyers are still active in the market,” Ms Ezzy said.
“The cash rate 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.”
