Sydney on track to have nearly 60 suburbs where $3 million prices are the norm
There has been a surge in suburbs where $3m is the norm for house prices, with 10 suburbs hitting the milestone last year and another 18 due to pass it soon. SEE WHICH SUBURBS MADE THE $3m CLUB
The number of Sydney suburbs where you need $3 million just to get in the front door is booming with the list set to be nearly 60 by the end of the year.
Property sales data showed median house prices surpassed $3 million in another 10 suburbs last year, taking the total number of super-rich suburbs to 39.
And another 18 are on track to have a median price of $3 million this year if price growth trends continue, realestate.com.au data showed.
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To put the real estate price explosion in perspective, only three other suburbs in the rest of Australia have a median of $3 million or more — two in Melbourne and one in Canberra.
And many of Sydney’s newest $3 million suburbs lack a waterfront or beach, such as Artarmon, East Lindfield and Killara on the upper north shore.
This pattern appears set to continue with neighbouring suburbs North Willoughby, Naremburn, Roseville and Lindfield flagged as soon to hit $3 million.
It’s a far cry from when multimillion medians were reserved for Harbour enclaves such as Vaucluse and Point Piper.
Realestate.com.au chief economist Nerida Conisbee said the growth in $3 million suburbs was “unprecedented”.
“Prices are beginning to move very quickly,” she said, adding that low interest rates, a shortage of listings and rampant buyer demand pushed the market back into boom territory late last year.
A Demographia report released earlier this week showed Sydney’s climbing prices were also unprecedented on the global stage.
The Harbour City ranks behind only land-starved Hong Kong and Vancouver as the most expensive places to buy a house in the world, as measured by the gap between average prices and incomes.
Ms Conisbee said Sydney had a similar problem to those cities in that its geography made it difficult to build new housing.
It was also a magnet for cashed-up buyers, she said.
“Sydney prices are so much higher than in the rest of the country because it is our only truly global city. It has the highest paying jobs and attracts the wealthiest buyers,” Ms Conisbee said.
Modelling from Australia’s largest banks showed prices will continue to go up.
Westpac forecasts released this week predicted a 20 per cent rise in Sydney values over the next two years. CBA has forecasted a 7.5 per cent rise in 2021.
Auctioneer Michael Garofolo of Cooley Auctions said buyers were being aggressive due to low interest rates.
“Low interest rates make a particularly big difference on higher-end properties. Buyers who would have been spending $2 million or $2.5 million a few years ago are now spending over $3 million,” he said.
Stiff competition is also encouraging people to dig deeper into their pockets, he said.
“A good auction in a good market would get 10 bidders, in this market we’re getting way more. If buyers want a quality home in their preferred location they have to (bid) high.”
‘IT’S TOUGH FOR PEOPLE LIKE US’
Homes are flying off the shelves in North Bondi, one of several suburbs to join the $3 million club.
A five-bedroom house owned by the same family for 40 years sold at auction yesterday for $3.56 million — $660,000 over the guide — after an expat living in South Africa out-bid four other buyers.
It was an incredible result for the owners of the Mitchell St house, who paid about $90,000 for the property back in the early 1980s.
PPD Real Estate agent Mary Anne Cronin said the suburb has seen incredible price growth in the past year due to a shortage of stock and strong demand from expats returning home.
“If this property went to market six months ago it would have only sold for about $2.7 million,” she said.
North Bondi couple Liam Jeffares and Carolina Lourenco said house prices in North Bondi were outrageous. “It is good for homeowners, but it makes it very tough for people like us looking to get into the market,” Mr Jeffares said.
Mr Jeffares said the insane price growth seen in North Bondi meant he and Ms Lourenco, who have just purchased in Dee Why, were forced to look elsewhere for their first home.
“We looked at Dee Why as it was the last suburb by the beach we found that was still relatively affordable to buy,” he said.
– with additional reporting byMatt Bell
Originally published as Sydney on track to have nearly 60 suburbs where $3 million prices are the norm
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