With dwelling values continuing to climb over the past year, the proportion of sales which have settled in excess of $1 million has also increased to new record highs.

The cost of housing has continued to rise across most parts of the country over the past 12 months, pushing the proportion of homes selling for at least one million dollars to new record highs.  Bracket creep should come as no surprise in markets like Sydney and Melbourne where dwelling values have increased by 77% and 61% respectively over the past five years.  While the rise in housing values has been most pronounced in Sydney and Melbourne, most other capital cities and regional areas have also seen a proportional lift in home sales over the million dollar mark.

Over the 12 months to June 2017, 15.4% of all house sales and 8.8% of all unit sales nationally were at a price of at least $1 million.  By comparison, 12 months earlier 14.4% of all house sales and 7.5% of all unit sales were at least $1 million in value.

Annual % of sales of at least $1 million,
National

The instances of dwellings selling for at least $1 million is much more prevalent across the combined capital cities.  Over the 12 months to June 2017, 23.2% of all houses and 10.8% of all units sold in capital cities were sold for at least $1 million.  The proportion of sales of at least $1 million has increased over the year from 21.5% of houses and 9.1% of units.

Annual % of sales of at least $1 million,
Combined capital cities

Regional housing markets generally have lower housing costs than capital cities however, the proportion of sales occurring for at least $1 million is also increasing in these areas.  Across the combined regional areas the proportion of houses selling for at least $1 million has increased from 3.5% in June 2016 to 4.1% in June 2017.  Meanwhile, the proportion of units selling for at least $1 million has increased to 3.5% of all sales in June 2017, up from 3.2% a year earlier.

Annual % of sales of at least $1 million,
Combined regional areas

Delving into the individual capital cities shows that Sydney and Melbourne have had substantially more properties sell for at least $1 million over the past year than the other capital cities. 

Over the past year, 47.8% of all houses and 21.3% of all units sold in Sydney transacted for at least $1 million.  By comparison, 10 years earlier just 13.8% of houses and 4.7% of units transacted from at least $1 million over the year.

In Melbourne, more than a quarter (25.9%) of house sales and 7.4% of unit sales were at least $1 million in value.  By comparison, ten years earlier 5.8% of house sales and 2.7% of unit sales over the year were at least $1 million. 

In all of the other capital cities the proportion of houses selling for at least $1 million is higher than it was a decade ago.  More than 10% of house sales over the past year in Perth and Canberra were at least $1 million in value. Perth is also the only city to have recorded a lower proportion of unit sales of at least $1 million over the 12 months to June 2017 compared to a decade earlier.

Annual % of sales of at least $1 million,
Individual capital cities

With dwelling values continuing to climb it is anticipated that in another 12 months an even higher proportion of sales will be sitting at or above $1 million.  While the flip-side of this is that the ongoing increase in the proportion of residential properties selling in excess of $1 million highlights the ongoing deterioration in the availability of housing affordability.  Although the Federal Government attempted to address housing affordability in the Budget this year, it is clear that in order to improve housing affordability there is much more work to be done on both supply and demand drivers of the market.

Cameron Kusher
Senior Research Analyst, CoreLogic