The number of suburbs with million-dollar price tags has skyrocketed over the past year once the domain of affluent inner-city suburbs, lesser-known areas are going up in price and it’s mainly due to covid. To tell us more is and for her economist at Ariah Group. Great to see you as always. And.
You two, let’s start with a lockdown, first of all, for Victoria, because this weekend, how is it going to affect auctions? Will they be put off at all, be virtual, or a bit of both?
A bit of both. So because Victoria spent so much time in lockdown last year, a lot of the agents, you know, they know the ropes. They’ve done this before. So we will see some auctions go online. At the same time, some vendors may prefer to delay selling their properties. So we will see a bit of a dip in sales volumes over the last weekend of autumn.
All right. Will the amount of Aussie homes, as we’ve just mentioned, over one million dollars is certainly shot up over the past year. And homes with a seven-figure price tag, they’ve become more popular. Where are we seeing these homes?
Yeah. So when we talk about growth in million-dollar suburbs, we’re talking about suburbs where maybe 20 percent of properties had that one-million-dollar price tag 12 months ago. Many of these areas now have 90 percent of properties at or above that level. So out of suburban regional areas, particularly those areas where it’s still possible to commute into CBD, have seen the highest growth in million-dollar price tags. New South Wales has really been that star performer, followed by Victoria.
So what about for people who haven’t got anything in the market they want to get into the property market, they might not even have the deposit for that? What is some advice for them?
Well, that’s a really difficult one, isn’t it? I mean, the biggest barrier to entry when prices continue to rise is achieving that deposit. Interest rates are very low at the moment, which means debts more affordable. But you still have that deposit hurdle to get over. Now, the government’s helped out a little bit by offering some schemes that enable people to get into the market with a smaller deposit. But the number of places available doesn’t meet the demand for those schemes.
Yeah, it’s a tough one, isn’t it, in terms of the the growth in property, what would be the main reason for this?
Well, the main reason for this is that if we look at the particular areas that have seen price growth, there are areas that are appealing to that covid that new way of life that a lot of people are leaving. So with remote working more the norm than it was in the past, people are willing to live a bit further out. The other thing is that with prices rapidly rising across so much of the country, people are having to look a bit further out as well.
So. And do you think that this growth is actually going to plateau or do you think we’ll see house prices skyrocket and spread to even further out the suburbs?
Yeah, so we are forecasting that price growth is going to continue at the end of the year. However, we don’t think that we’ll see the same level of growth that we saw in the first half of the year. Now, as we come to the end of the autumn period, we are likely to see demand dip a little. We also are less likely to see the same number of properties come to the market. So a lot of people don’t like to sell their properties in winter and may hold off until we get to springtime.
Well, it’s been fascinating watching this situation through covid and as you mentioned, certainly some prices increasing for the rest of the year for many areas. Thank you so much. And we heard from Aria. Great. We’ll touch base with you again next week.