Melbourne ‘Key’ Suburbs are BOOMING! As the pool of million-dollar suburbs swells.

by | Sep 4, 2023 | property

Dear Fellow Property Investor,

The number of suburbs where homes are worth at least $1 million has jumped by 10.6 per cent to 806 since values bottomed out in February, reflecting the unexpectedly sharp rebound in the housing market, data from CoreLogic shows.

While only four suburbs joined the million-dollar club for the first time, 81 have re-entered in the past 12 months, buoyed by the 4.1 per cent increase in house prices since February.

Eliza Owen, CoreLogic head of research, said the pool of million-dollar homes could expand in the coming months as property prices rise.

“As long as we’ve got an upswing in the market, the more likely we’re going to have more areas joining the million-dollar club, so it’s becoming less exclusive. But this establishes Australia as a million-dollar housing market, not just Sydney any more, but also smaller markets such as Adelaide,” she said.

“There’s also a more concerning realisation which is just how much of the market is sitting over a million dollars at the median level.

“It gives a bit of a jolt on issues of wealth and affordability, with home-ownership data showing it becomes more concentrated among wealthy households.”

Across the combined capital cities, homes in 31.3 per cent of all suburbs are now worth at least $1 million, up from 28 per cent in February.

Sydney accounted for the bulk of million-dollar homes with 60 per cent of all suburbs fetching a million-dollar median price, followed by Canberra with 29 per cent and Melbourne 28 per cent.

Meanwhile, the portion of million-dollar suburbs increased to 12.2 per cent in Brisbane, 15.3 per cent in Perth and 16.7 per cent in Adelaide.

“For first-home buyers, that’s a lot of the market that looks more unattainable,” said Ms Owen.

To afford a million-dollar home, a single home buyer would need to earn $164,000 a year, while a family of four would need $183,000 a year according to RateCity’s calculations.

Assuming interest rates at 6.39 per cent and a 20 per cent deposit, their monthly mortgage repayments would be about $5000 a month, which is 4.9 times the single buyer’s income, and 4.4 times the family of four.

Home buyers would also need to come up with a $200,000 deposit and $39,000 for stamp duty.

“A person earning the average wage has next-to-no chance of buying a home in this price bracket, unless they team up with someone else, or hit up the bank of mum and dad for a giant wad of cash,” said Sally Tindall, RateCity’s director of research.

“Most buyers’ home-buying budgets have been hammered by the 12 interest rate rises. A person on the average wage has seen the maximum amount they can borrow from the bank drop by almost $190,000 since the start of the hikes in May of last year.

“For some people, that’s been enough for them to throw out their property-buying plans altogether. So, the divide between those families that have property and those that don’t will continue to rise.”

Suburbs within 20 to 30 kilometres of CBDs accounted for the bulk of those re-entering the million-dollar club, according to CoreLogic.

This includes Blacktown suburbs Kings Park, Quakers Hill, Riverstone and Toongabbie, where prices rose between 4.8 per cent and 6.8 per cent since February.

In Melbourne, Cheltenham, Heatherton, Yallambie and Croydon North regained their million-dollar status as did Gordon Park, Sandgate, Wavell Heights and Eight Mile Plains in Brisbane.

Suburbs rejoining the $1m club

Let me ask you something…

Do you have a game plan for 2023?

Or will you watch savvy, educated, market-ready investors snap up all the bargains at the bottom of the Melbourne property cycle (which in my opinion by the way has already bottomed out in November 2022),

Or will you join them?

So, what are you waiting for?

Reserve your place and join me and 55 like-minded property investors at the next Real Estate Investing Fast Track Weekend!

Click HERE to reserve your seat now!

Kind regards,