Sydney still on the money on richest suburbs list: RP Data

Using median values analysis for houses rather than median prices, RP Data has been able to identify Australia’s most expensive locations for home ownership.

The data was based on RP Data’s estimates of the value of virtually every residential property across the country and then taken the middle value for each suburb. This approach yielded a much more reliable indication of what a buyer is likely to pay for the typical house within a suburb, compared with the median price, which is based on only those homes that have sold during the period.

The suburbs on the RP Data Rich List show quite a few factors in common: they tend to either be close to a CBD, close to the water, or they are houses within the suburbs that often have a heritage value and are perched on larger blocks of land. Many of the suburbs show a combination of all these factors.

A majority of Australia’s elite real estate markets are clustered around the harbourside suburbs of Sydney, with the exclusive suburb of Point Piper topping the list with a median value of $7.382 million.

Not surprisingly, based on ATO statistics, Point Piper average individual incomes are the highest in the nation, averaging just over $182,000.

Point Piper also has a very high rate of home ownership. Recent census data confirmed that there are only 148 detached houses in the suburb of Point Piper and with 57% of them owned outright.

While there are many areas on the Top 25 List, of note is the Gold Coast suburb of Main Beach, which is Queensland’s most expensive suburb for houses; a factor which is assisted by the absolute scarcity of houses compared with units in the suburb.

Interestingly, Main Beach has a mere 88 detached houses within the suburb, equating to just 5.9% of all dwellings.

Across the top 25 most expensive suburbs nationally, only three are located further than 10km from the capital city CBD, with one of the exceptions being Eagle Bay in the Margaret River region of Western Australia where the median house value is $2.86 million, and the most expensive home currently on the market is priced at $10.5 million.

Battery Point is the only suburb in Australia where it costs less than $1 million to buy into the most elite housing market. Battery Point currently has a median house value of $861,560 placing the suburb at position 365 on the Rich List.

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The vast majority of people can’t afford to buy or, for that matter, rent in these suburbs. In fact, the population living within the most expensive 25 suburbs accounts for just 0.5% of Australia’s population.

With four consecutive months of growth now in the housing market, it is safe to say the Australian housing market has moved into a recovery phase. Sydney and Melbourne are leading the way with values up 4% respectively since the end of May.

The Reserve Bank’s October rate cut is likely to provide further stimulus to the housing market and it will be important to monitor how consumers respond to the more affordable housing environment.

The RBA will undoubtedly be aiming to find the monetary policy sweet spot that keeps a lid on housing prices while ensuring financial stability.

Tim Lawless is national research director of RP Data.

This article originally appeared on SmartCompany.