The Million Dollar Home Club

From the latest results of RP Data’s Property Pulse, 2011 is likely to be remembered as the year of the million dollar property.

Despite below average sales volumes during 2010, the number of suburbs with a median price at or in excess of $1 million increased to 212 suburbs nationwide. The December quarter report showed that over 2010 the number of suburbs with a $1 million price tag nationwide grew by a whopping 35 per cent. Below is a figure showing the top 25 most expensive suburbs in 2010.

million dollar club

Mia Santoromito from Smart Property Investment says “This is quite a feat when you consider that in the very same year capital city home values only saw an increase of 4.7 per cent across the country.”

When we consider that in 2005 just 78 suburbs carried a price tag of $1 million or more, this 172 per cent rise since then certainly exposes Australia’s ever-increasing appetite for top-notch properties in prestige locations.

According to Cameron Kusher, senior research analyst for RP Data, these results highlight not only how strong the demand for premium property is but also that Australian residents are willing to pay huge prices for a premium property in a prime location.

As to whether 2011 will bear similar fruits, Mr Kusher says it is unlikely that we will see another 35 per cent increase.

“We are anticipating subdued residential property market conditions during the year and the premium sector’s performance will also be impacted by high interest rates and ongoing global economic uncertainty.

“These conditions are likely to hamper purchaser confidence and reduce the propensity of buyers to spend in excess of $1 million,” he says.

In light of this, it looks like 2011 is set to be the year of the conservative investor.

RPDATA (2011) Property Pulse