Million-Dollar Homes Now Norm in Australia, Raising Affordability Concerns
The Australian housing market has seen a significant shift, with luxury properties becoming increasingly common. A million-dollar price tag is now the norm in many suburbs, making homeownership unaffordable for a growing number of people.
In the last year, 30% of all home sales in Australia were for $1 million or more. This trend is not limited to capital cities. South Australia now has 116 Adelaide housing markets with a median price of $1 million or more. Regional Queensland has 141 million-dollar markets, with four new suburbs in Toowoomba and one in Townsville joining the exclusive club.
Nationally, dwelling prices have surged by 46.8%. As a result, a household earning the average income would need to dedicate more than 50% of their pre-tax earnings to service a loan on a million-dollar property. This has made homeownership unaffordable for a growing portion of the population. In Sydney, only one in seven suburbs has a median house price below $1 million, reflecting the city's status as the most expensive capital.
Brisbane has seen the most growth, with 38 suburbs joining the million-dollar club in the last 12 months. Western Australia also has 141 million-dollar markets, including unit prices in three suburbs.
The rise in million-dollar homes is a clear indicator of the strength and breadth of Australia's housing market. However, it also raises concerns about affordability, with many people struggling to enter the stock market or upgrade their homes. As prices continue to rise, policymakers will need to consider measures to improve housing affordability.
