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Australians increasingly searching for properties in higher price brackets


Australians are adapting to the hot property market, with one figure showing how much property prices are actually increasing.

Australians looking for a new house are increasingly searching for properties in higher price brackets with almost half of Sydney buyers looking to spend more than $1.5 million.

There’s been an explosion in property prices across the country this year with many home buyers pushed to the upper limits of their budgets to secure a property.

CoreLogic’s home value index for all properties shows Sydney prices have grown by 11.66 per cent year-on-year, Melbourne by 5.43 per cent, Brisbane (including Gold Coast) by 12.44 per cent, Adelaide by 11.98 and Perth by 8.40 per cent.

Figures released last week showed categories of all housing in Sydney grew by three per cent in May — one of the largest monthly rises on record.

The median price of a house in the Harbour City is now $1.186 million, while the median unit price is $782,000, according to CoreLogic. Prices have climbed 10 per cent since January. figures now show home buyers are adjusting their expectations and searching for properties at higher prices.


Almost half of Sydney home buyers on are now looking to spend more than $1.5 million on their next property.

An analysis of search activity found the most searched price bracket on the website is more than a million dollars.

About 43 per cent of all Sydney buyers of a house or apartment are now looking to spend over $1.5 million — double the national average and 16 per cent more than the next best capital, Melbourne.

Melbourne data shows over half of online searches in April were for homes worth between a maximum of $1 million and $1.5 million.

Almost a quarter of searches were for properties valued up to $1.5 million, a 5 per cent increase over three years.

Only 26 per cent of searches were made for properties worth $750,000 or less compared to 46 per cent in 2019, according to the data.

“The supply of homes valued under $750,000 is reducing,” REA Group economic research director Cameron Kusher said.

The Real Estate Institute of Victoria revealed exclusively to the Herald Sun in April that Melbourne’s median house price had exceeded $1 million in the first three months of 2021.

This figure took into account houses sold from January 1 to March 31.


In Greater Brisbane, number of buyers searching for homes in the $1 million price point has also gone up 30 per cent in three years, from 20 per cent of all buyers in 2019, to 26 per cent today.

By comparison, the number of buyers searching for homes around $500,000 has tanked by 43.3 per cent, and those shopping around $750,000 has fallen 16.6 per cent.

Median house values across Brisbane range from $380,000 (Archerfield) to $2 million (Teneriffe), with the median house value in the Brisbane local government area now $754,500.


A greater number of buyers are searching for homes in the $1 million price point in Greater Brisbane.Source:Supplied

South Australia

Property searches for homes worth up to $1 million in South Australia have climbed over the past two years.

Figures from show searches climbed from 14 per cent in April 2019, to 18 per cent in the same month of 2020, then to 20 per cent in 2021.

Properties up to $500,000 remained among the most popular but the data showed the proportion of searches in that price range dropped from 45 per cent in April 2019, to 36 per cent in the same period of 2020, then 29 per cent in 2021.


There has been a substantial rise in the number of potential buyers in Tasmania searching in the $750,000 and $1 million price brackets over the past three years.

While the $500,000 range remains Tasmania’s largest price bracket, the interest in this range has dipped significantly.

In April 2019, 18 per cent of home searches were in the $750,000 bracket, but in April 2021 that percentage has shot up to 29 per cent, or almost one-third of all searches.

In the $1 million range, searches have grown from 9 per cent up to 16 per cent.

Meanwhile, the $500,000 range represented 56 per cent of searches in 2019 but has receded to 43 per cent this year.

Tasmania’s most affordable search, $250,000, has shrunk from 11 per cent to just 3 per cent.

The story was similar in greater Hobart with searches dropping from 5 per cent to just 1 per cent.

Most property searches in greater Hobart this year were in the $500,000 bracket (34 per cent in 2021, down from 50 per cent in 2019).

The $750,000 range grew to 31 per cent, which was up from 23 per cent, followed by $1 million searches (21 per cent, up from 14 per cent) and $1.5 million (7 per cent, up from 5 per cent).


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Boomers a ‘Force of Change’ in Retirement Property Market

Property Market

As teenagers they invented pop culture and now—much older, collectively wealthier and arguably wiser—they are defining a new age group and re-inventing retirement living.

Millenials may have surpassed them in numbers but baby boomers are still having significant influence on world economies and trends—not least in the property market.

“The baby boomers are coming through and have become a force for change in the seniors’ market,” said Cameron Kirby, managing director of Kirby Consulting Group, a retirement and aged care specialist.

“The more progressive operators are definitely getting their ducks in a line.

“And there’s a lot of developers interested in dipping their toes in the market for the first time, some of them with more than 30 years’ experience in the development industry, because they can see there is huge opportunity.

“[But] many developers that want to enter into this space are probably a bit reticent because they’re worried about the complexity of it, they’re worried about the unknowns.

“The opportunities, however, far outweigh any of their concerns.

“And if you’re offering what the market wants, you’re going to be successful.”

Kirby will be a speaker at The Urban Developer Developing For An Ageing Demographic vSummit on April 28.

“The sector is continuously changing,” he said.

“You’ve got land lease communities and over-55 developments that have been moving into the traditional retirement village space.

“And, at the moment, there’s a lot of talk about integrated care in retirement living with a greater weighting on having more retirement villages and less aged care.”

Last year, a survey by benchmarking firm StewartBrown showed 58 per cent of aged care homes were operating at a loss, up from 55 per cent the previous financial year, and 32 per cent made a cash loss.

“Aged care has got some major challenges … but in the meantime there’s also the baby boomers coming through,” Kirby said.

“What I’ve seen over the last 10 years is a bit of a slide where low-care people that used to go into aged care are more likely to go into retirement villages and, equally, people that used to go into more traditional retirement villages are now probably more interested in moving into land lease communities and over-55s concepts.

“Land lease communities are growing very fast and are hugely attractive, there’s no doubt about that … but retirement villages have upped the ante enormously as well, they tend to offer much more wellness and are moving more towards the care side of things.

“Certainly, operators who are offering care in retirement villages are going from strength to strength.

“There’s an increasing amount of quality retirement villages with hotel and resort-style living and state-of-the-art amenities coming online. Pools, gyms, spas, saunas, cinemas, you name it they’ve got it. 

“But those retirement living operators that have a full continuum of care solution that’s what the market is demanding … [the boomers] know they’re going to need some support down the line so they’re planning for their future.

“It really doesn’t matter, however, whether you’re doing aged care, retirement, over-55s or land lease community … because demand is outstripping supply. There is a market for all of those and they attract very different types of buyers.”

Kirby said given Australia’s ageing demographic, the seniors and retirement market was a “much more defensive proposition” for developers.

“Just as healthcare is a defensive stock on the stock market, I think seniors living is a much more defensive play in the property sector,” he said.

“It tends to be more needs driven than what a straight-out residential property play would be.

“And so, I think if we are going to be headed towards a softer property market this is an area that can really shine because seniors will still have the wealth and will still want to move and look at downsizing opportunities.”


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Houses still in high demand, apartment prices lag


The price growth of apartments continues to lag rocketing house prices in many suburbs across Sydney and Melbourne, with the trend showing little signs of abating.

The widening price gap between houses and units is a long-term trend driven by land scarcity in our biggest cities, with the difference tending to be widest between houses and high-rise apartments.

While house prices in Sydney’s North Ryde soared 29 per cent in the year ended March 31, unit prices in the suburb grew by a mere 6 per cent. Similarly, prices in Homebush grew 29 per cent, compared to unit price growth of just 7 per cent.

In Sydney’s Pennant Hills, house prices grew 24 per cent, while unit prices were flat, figures from CoreLogic show.

It is the same story in many parts of Melbourne, with Essendon North house prices growing by 19 per cent over the same period, while apartment prices fell by almost 1 per cent.

Houses in Melbourne’s Canterbury saw their prices jump more than 14 per cent, while units dipped 4 per cent. In inner-city Hawthorn East, houses were up 9.6 per cent, compared to a 6 per cent fall in unit prices.

Earlier analysis by CoreLogic showed more expensive property markets, particularly those close to CBDs and in areas where there are high numbers of units relative to houses, tend to have the biggest price gaps.

Eliza Owen, head of research at CoreLogic, says one of the reasons for the relative recent poor price performance of unit markets is COVID-19 related travel restrictions, including the closure of Australia’s international borders.

Demand for investment units in urbanised centres likely fell because of their high exposure to migrants and international students.

During the height of the pandemic, many units were empty, particularly in inner Melbourne.

The re-opening of international borders is seeing arrivals from overseas rising quickly, which should help to support the prices of units in both Sydney and Melbourne, she says.

However, Owen says one area of concern remains the prospect of higher mortgage interest rates, with prices of investment units more sensitive to rate movements than houses.

Many analysts expect the Reserve Bank of Australia to start increasing official interest rates this year, possible as early as June, with lenders expected to pass on any hikes in their variable rate mortgages.

Following two years of surging property prices, the big gains made over the past year appear to be over.

Sydney house prices were 0.1 per cent lower in March after being flat in February. Unit prices were 0.5 per cent lower in March and 0.3 per cent lower in February.

In Melbourne, house prices down 0.2 per cent lower in March, following flat prices February. Unit prices were 0.2 per cent higher in March and 0.1 per cent higher in February. However, those small gains came after big falls in inner-city unit property values during COVID-19 restrictions.

Coming off the back of strong annual growth, falling affordability continues to be a key factor affecting property market conditions.

A surge in the cost of living and rising rents is restricting the ability of prospective homeowners to save and borrow.

In last month’s federal budget, the government expanded the number of places available in its low-deposit scheme.

The program allows first-home buyers, and others, to buy new or existing dwellings with a deposit of only 5 per cent, instead of the usual 20 per cent that is needed to avoid paying expensive lenders’ mortgage insurance.


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Brisbane house prices leave units in the dust

Brisbane house prices

The gap between house and apartment prices in Brisbane is now the widest in at least two decades, but is set to shrink over the next 12 months as housing affordability bites and buyers choose cheaper options, Colliers says.

Colliers residential director Queensland, Andrew Roubicek, said the price difference between houses and apartments in Brisbane has reached 45 per cent compared with an average of around 20 per cent between 2003 and 2015.

Brisbane house prices further escalated with the onset on COVID-19 when people placed a higher value on privacy with interstate migration to the Sunshine State also propelling Queensland’s property market.

Property data company CoreLogic estimates that Brisbane house prices increased 32 per cent in the year ended March 31 compared with 15 per cent growth for units over the same period.

CoreLogic said house price growth is slowing faster than units and Mr Roubicek predicted that Brisbane apartment values will rise by “at least” another 15 per cent in the next 12 months.

Mr Roubicek said rising construction costs have hit the new apartment market hard and that comparable established stock costs about 25 per cent less.

“There have been several examples of new developments achieving pre-sale [targets] only to have developers refund deposits and tear up contracts because building costs escalated to a point where it was financially unviable,” he said.

“As a consequence, developers who are looking to acquire new development sites are forced to increase their projected sales prices by around 20 per cent.

“Just 18 months ago a two-bedroom apartment in Brisbane might have sold off the plan for $9000 per square metre.

“But to build that apartment today the developer would need to achieve a sale price of $11,000 per square metre for the project to stack up.”

He said as result new stock is selling slower than established units, a trend that will play out through the rest of this year.

“The market is coming to terms with those newer prices and are seeing in the short-term better value for money in the established unit market.”

He said it is a similar scenario to when GST was introduced in 2000.

“When GST came into the market overnight the cost of housing went up 10 per cent and put more demand into the established market, where the prices of stock grew and the difference between new and second hand became narrower.”

Mr Roubicek said he believed the record price gap between houses and apartments will contract through the year.

“If you believe in history, if you believe in charts, and take a long-term view you would have to think that gap is going to narrow because everyone’s talking about affordability, everyone’s talking about interest rate movements,” he said.

“Natural forces will push what would have been a buyer of a detached home back into the unit market because of affordability.”


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