$1m+ property values on the rise

Across the combined capital cities, 23.8 per cent of all houses and 11.6 per cent of all units sold over the year sold for more than $1 million, up 21.7 per cent and 9.8 per cent, respectively, a year earlier.

Analyst Cameron Kusher said that the ramp up has been rapid.

“Five years ago, just 9.8 per cent of all houses and 3.9 per cent of all units sold for more than $1 million. A greater number of houses sold for more than $1 million over the past year than sold for under $400,000.”

But Mr Kusher added that the gap was smaller across the combined regional markets.

“Only 4.6 per cent of houses and 3.8 per cent of units sold at or above $1 million, up from 3.8 per cent and 3.6 per cent,” he said.

“Five years earlier the numbers were 1.7 per cent and 2.2 per cent. While in the combined capital cities the share of $1 million sales is significant, it remains relatively small in those areas outside of the capitals.”

The report found that Sydney recorded the highest proportion of $1 million-plus sales throughout 2017.

“Over the year, 49.3 per cent of all houses sold were at least $1 million, up from 45.4 per cent in 2016, and 18.8 per cent at the end of 2012,” said Mr Kusher.

“Over 2012, only 5.4 per cent of all Sydney units sold for at least $1 million, but by 2016 the share had increased to 18.7 per cent and then by the end of 2017, it was up to 22.3 per cent.”

Mr Kusher also said that recent falls in Sydney tend to be in the higher value properties, so he expects a drop in $1 million-plus sales in Sydney in 2018.

In Melbourne, the share of $1 million-plus sales has climbed significantly over recent years.

Mr Kusher said that it was 28.3 per cent for houses and 8.3 per cent of units in 2017, up moderately from 23.7 per cent and 7.2 per cent in 2016, but substantially more than five years ago when just 9.7 per cent and of houses and 3.5 per cent of units sold for at least $1 million.

Conversely, he said that in Brisbane value growth has been “fairly moderate” in recent years.

“Throughout 2017, 8.3 per cent of all houses and 3.4 per cent of all units transacted for at least $1 million.

“A year earlier the figures were 7.5 per cent of all houses and 2.8 per cent of all units, and five years earlier they were just 3.6 per cent and 2.1 per cent.”

Climb

Mr Kusher said while dwelling values in Adelaide have increased by just 2.2 per cent over the past year, the share of stock selling for $1 million or more has continued to climb.

He said that Perth has been recording falls in values since 2014 and that the share of sales in the $1 million or more bracket has fallen over the year for both houses and units.

“Although the share of sales of $1 million property has declined over the year, it remains higher than it was five years ago for houses but lower for units when those sales accounted for 7.2 per cent and 3.4 per cent of all sales respectively.”

Mr Kusher said Hobart has “far” fewer sales of $1 million properties than other capital cities.

“But Hobart has also seen the greatest increase in dwelling values of all capital cities and has seen a fairly significant lift in the share of $1 million sales over the past year,” he said.

He said that Darwin has been the nation’s weakest performing capital city housing market for a number of years.

“At the end of February 2018, dwelling values were 22.3 per cent lower than their peak,” he said.

“Predictably, such substantial value falls have led to a significant decline in $1 million sales.”

He said that values in Canberra have increased by 3.2 per cent to February 2018 and as a result the share of sales of properties worth $1 million or more has also risen.

“The latest data is showing that a number of capital cities have now recorded falls in values, in particular the most expensive city, Sydney,” said Mr Kusher.

“Additional data also indicates that values are falling by the greatest amount across the premium sector of the housing market. Should these declines continue, it may result in a decline in the share of sales of properties at or in excess of $1 million throughout 2018.”

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