The million dollar suburbs: Median house prices boom, as clearance rates continue to soar

The property market has started the year strongly, as once again clearance rates in Melbourne and Sydney reached near record levels.

The turnaround in the market over the past 12 months has seen 275 suburbs now achieve a median house price of more than $1 million, according to figures from RP Data released late last week.

Over the weekend, Sydney reached a clearance rate of 86%, almost 16% higher than this time last year, while 77.3% of Melbourne properties sold.

Australian Property Monitors senior economist Andrew Wilson told SmartCompany Sydney’s clearance rate has been plus 80% for the past four weeks.

“This is a record for February and there have also been high numbers of auction listings,” he says.

“It was a challenge for the market which has been met. The average clearance rate has been just behind September, which was an all-time record.”

The combination of buoyant market conditions and low interest rates has driven up property prices in the past year, accounting for the increasing number of national suburbs with $1 million average median property values.

“Certainly Sydney has had prices up over 15% in the past year, so it’s no surprise this has resulted in a surge in median prices,” Wilson says.

“Not only has it been a surge in prices for suburbs, but whole areas have joined the million dollar club. In Sydney these areas are the inner west and the upper north shore and the south is closing in too.”

Topping the list of most expensive suburbs is Sydney’s Point Piper, recording a median value of $5,817,581, according to RP Data.

Sydney dominated the capital cities, with 24.6% of its suburbs in December 2013 in the million dollar club.

Other Sydney suburbs to make the nation’s top 10 most expensive list included Woolwich, Darling Point, Centennial Park, Cremorne Point, and Bellevue Hill.

Rounding out the top 10 were Peppermint Grove in Western Australia and Victorian suburbs Deepdene and Toorak.

In Perth there are 12% of suburbs with a median house price above $1 million, while in Melbourne there are 10.9%.

Wilson says Sydney’s million dollar club is now exceeding 2010 levels, but Melbourne and Perth are still catching up.

“There are still some suburbs in Melbourne that were previously at that point which aren’t any more and I predict Melbourne’s market will begin to stabilise, while Perth and Sydney will continue to grow,” he says.

“In Sydney there has been very strong growth in the mid-price range. One million dollars doesn’t equate to mid-range anymore.”

Nationally, 12% of all suburbs make the million dollar club in terms of house prices, but it’s a different story for units.

RP Data figures revealed only eight suburbs nationally have median unit values in the seven figures. Seven of the eight suburbs are from Sydney, while one Brisbane suburb also makes the list.

For units, the most expensive suburbs are Dawes Point, Point Piper, Darling Point, The Rocks, Millers Point and Huntleys Cove make up the top six, while Tennyson in Brisbane places seventh and Milsons Point in Sydney rounds out the eight.