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05-01-2016, 08:03 AM
- Jan 4 2016 at 11:45 PM
- Updated Jan 4 2016 at 11:45 PM
[img=1022x0]http://www.afr.com/content/dam/images/g/i/2/4/h/c/image.related.afrArticleLead.620x350.glxbpy.png/1451900834563.jpg[/img]The median house price is expected to top $1 million in 75 suburbs around Sydney over the coming 12 months if recent growth trends continue. Daniel Munoz
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by Duncan Hughes
Houses valued under $1 million could disappear in Melbourne and Sydney's inner- and middle-ring suburbs over the coming year if the pace of recent property price rises continues, according to analysis of house prices.
Many of Melbourne's traditional working class areas, such as western suburbs in the federal seat of Maribyrnong, held by Opposition Leader Bill Shorten, are being transformed into millionaire enclaves, the research reveals.
More than 70 suburbs ringing Sydney are predicted to have a $1 million median by the end of next year, compared to 65 suburbs during the previous 12 months.
"Buying a quality freestanding home on more than 400 square metres on the traditional inner ring will cost more than $1 million," said Christopher Foster-Ramsay, managing director of Capital Home Loans, a mortgage broker.
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An increasing number of owner-occupiers, investors and first-time home buyers who want to live in an area are buying apartments, he added.
Nearly 30 Sydney suburbs, some more than a one-hour commute from the central business district, are expected to top the one-time trophy price tag of $2 million, analysis reveals.
PRICE RISES TIPPED TO SLOW
The analysis, which was exclusively compiled for The Australian Financial Review by research group Corelogic RP Data, is based on the assumption that the average rate of appreciation during the past three years will continue for the next 12 months.
It is based on the median or middle value property, rather than the average, which can be distorted by a handful of blockbuster sales.
Market commentators, including John Symond, chairman of Aussie Home Loans, are tipping property value increases to slow over the next 12 months.
"There will be hot spots – particularly inner-city suburbs – where demand will continue to outstrip supply," Mr Symond said.
There are 75 suburbs around Sydney where the median price is expected to top $1 million over the coming 12 months if recent growth trends continue.
Many of the suburbs, such as Belfield, about 14 kilometres south-east of Sydney's central business district, have seen annual median price increases of more than 11 per cent since 2012, and already have a median close to $1 million.
Others, such as Waterloo, which is four kilometres south of the CBD, have experienced increases of 17 per cent a year, which is more than 10 times the official rate of inflation.
The gilt-edged postcodes are creating a golden arch around Sydney's CBD covering more than 15 kilometres – pushing those without huge deposits, big salaries or generous benefactors further out.
Communities more than 160 kilometres north of Sydney, such as Hamilton South, which is a suburb of Newcastle, need to maintain recent growth rates of 10 per cent to slip into the $1 million bracket.
'WEALTH ARC' OVER 16KM
The rippling wealth effect from traditional exclusive central suburbs is also creating a widening wealth arc around Melbourne's CBD, spreading up to 16 kilometres west, north-east and south-east.
The gentrification of the city's inner communities, which has taken about 40 years to reach suburbs like Essendon West and Northcote, has produced annual growth rates of about 10 per cent, pushing them close to a $1 million median.
Suburbs in the north-east with even higher growth rates are particularly popular with Chinese buyers for investment property and student accommodation.
First-time buyers and growing families needing more space are often moving into sprawling suburbs built around freeways and toll roads in the city's south and west.
Tasmania, South Australia, the ACT and the Northern Territory still lag the nation's pace-setters, with no suburbs expected to top $1 million based upon growth projections.
North Perth, which is tipped to top $1 million next year, still offers value for money, with a seven-figure price buying a renovated, triple-fronted Edwardian within an easy commute of the city.
Read more: http://www.afr.com/real-estate/inner-melbourne-and-sydney-a-millionaires-club-for-home-owners-20151231-glxbpy#ixzz3wK7RBnVM
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