Sydney
The number of million-dollar markets has climbed to 1,257, up from 1,057 suburbs in 2023, recording an increase by 18.5% or 218 markets. Pixabay

Australia now boasts of 200 suburbs in the exclusive "million-dollar club," where the median house value exceeds AU$1 million, driven by the soaring real estate prices, a new report has revealed.

New data from CoreLogic shows a 29.3% rise in the values above AU$1m from the previous market peak of 26.9% recorded in April 2022. The number of million-dollar markets has climbed to 1,257, up from 1,057 suburbs in 2023, recording an increase by 18.5% or 218 markets, News.com reported.

Sydney and Brisbane saw the highest number of new suburbs reporting homes and units priced above AU$1 million, with 46 new suburbs added in each city.

"At the onset of Covid, just 14.3% of house and unit markets had a median value at or above the $1m mark," CoreLogic economist Kaytlin Ezzy stated. "With almost 30% of suburbs now posting a seven-figure median, the increase is a natural consequence of rising values and worsening affordability."

Due to the high rate of interstate migration and a persistent shortage of listings, Brisbane witnessed a property value surge by 65.1% since Covid, Ezzy stated.

"Such a significant increase in home values has eroded much of the city's previous affordability advantage, with Brisbane now having the second highest median dwelling value at $875,040 among the capitals," she said.

The report also included Greater Adelaide as experiencing a strong growth rate in home prices. Real estate agent Kate Smith said the area became highly sought after in the wake of Covid.

"They have always been popular but among locals," she said. "After Covid, there became a real new spotlight on the area. Anyone outside of the western suburbs hadn't discovered this part of Adelaide before and then all these people from interstate were snapping up property because they couldn't believe you could get that quality of house and that kind of location for the dollars."

According to August data, there were 20 suburbs with a median house valued above AU$990,000. "It's likely we'll see a number of these markets cross the million-dollar threshold within the next few months," Ezzy said.

Meanwhile, new data showed 65 unit markets in Sydney and Melbourne, where property values are still below their 2010s highs. In some areas, housing is becoming more affordable despite high interest rates, and many sellers are willing to accept a loss. However, buyers are not purchasing due to the wrong type of supply.

Though some unit markets in the country have recovered from the 2010s apartment oversupply, many Sydney and Melbourne markets are still facing challenges.

The 2010s apartment boom led to the construction of units that were suited for a specific type of buyer. However, as today's market needs have changed, many first home buyers were cautious of defects and small sizes.

Moreover, investors have been discouraged by a low capital growth over the past decade, and, despite rising rents, higher interest rates are making some of these properties less attractive.

However, some unit markets, like Tallawong and areas in Sydney and Melbourne, have recently seen strong growth, suggesting that buyers may be drawn back if prices are more appealing.