Ballooning house prices mean $2 million is the new $1 million

Adam Smith 1 November 2016

Australian money dollarsAs median house prices continue to rise, a data company has suggested $2 million might be the new $1 million.

Analysis by CoreLogic shows the number of homes in Australia selling for at least $2 million has seen a sharp upward trend, driven largely by price rises in Sydney and Melbourne.

“While a home selling for or in excess of $1 million was once the domain of the wealthy and indicative of the luxury housing market, sales of or in excess of $1 million are becoming much more regular.  Over recent years there has also been a substantial rise in sales of homes at or above $2 million however, they remain a much smaller proportion of overall sales than sales between $1 million and $2 million.  Perhaps $2 million is the new $1 million?” CoreLogic researcher Cameron Kusher said.

Sydney house prices still skyrocketing

Kusher said 11,319 houses and units sold for at least $2 million over the 12 months to June 2016. This compares to 10,668 the previous 12 months. Comparing the figure to 10 years earlier, the trend is even more pronounced. Just 3,254 houses and units sold for at least $2 million in the 12 months to June 2006, and 10 years prior to that only 236 sales hit the $2 million mark.

Kusher said the trend was particularly prevalent in Sydney and Melbourne. Over the 12 months to June 2016, more units sold for at least $2 million in Sydney and Melbourne than houses sold above the price point across each of the other capitals, Kusher said.

“Sales of properties at a price point above $2 million are becoming a much more regular occurrence in Sydney and Melbourne while they are much rarer elsewhere in the country.  This is just another example how the cost of housing in our two largest capital cities is detaching itself from the rest of the country,” Kusher said.

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