Million dollar homes in Melbourne

A million dollar home used to be the preserve of the wealthy. Now, though, many Melburnians are millionaires – on paper at least – simply because the homes they bought years ago have appreciated in value so much they are now worth more than $1 million.

By the end of last year 59 Melbourne suburbs had median house prices of more than $1 million, in particular, suburbs in inner and middle Melbourne. Three suburbs – Northcote, Richmond and Strathmore - had million-dollar medians for the first time in the December quarter. Flinders, benefiting from the opening of the Peninsula Link, also joined the list.

But just how many of us are actually paying more than $1 million for our homes?

In the three months to the end of December last year there were 15,127 house sales across Victoria, with 2769 of those at or above $1 million – in fact their total value was $4,401,275,801 of the $10,721,261,450 worth of property sold.

It’s no great surprise that most of these were in Melbourne’s sought-after inner suburbs, close to infrastructure such as public transport and to the CBD, where the most million-dollar suburbs are located. There were 4572 sales during those three months in the inner suburbs and more than a quarter of them – 1433 – were for $1 million or more.

It is also not surprising that most of these million-dollar sales were auctions sales – after all, Melbourne’s inner and middle suburbs have given rise to its reputation as Australia’s auction capital, while auctions in outer suburbs and regional Victoria have gained popularity more recently. While just over a quarter of all sales in inner Melbourne were private sales, only 274 of the one million-dollar-plus sales were private sales. All the rest were by auction or sold before auction.

In the middle ring suburbs – that is, those between 10 km and 20 km from the centre of the city – there were 5199 transactions with more than one fifth of them, 1081, for $1 million or more.

Melbourne’s outer suburbs are often thought of as comprising mostly affordable homes sought by first-time buyers, families and those on a tight budget. But many people choose to live further from the city centre and are also willing to pay more. Some of those making that choice are buying superb homes to do so. So there were 226 sales worth more than $1 million in the outer suburbs in the December quarter and 29 such sales in regional Victoria.

Although the 2015 market is only recently underway, with auction activity only commencing in mid-February, the trend seems similar.

Preliminary results for the March quarter – with results to be finalised – show that 1510 of the 8317 home sales across Victoria so far this year were at or above $1 million. But in inner Melbourne just under a third of all sales so far this year – that’s 762 of the 2439 sales – were for $1 million-plus. Only 124 were private sales.

For middle Melbourne so far 565 of 2962 sales were for $1 million or more and in the outer suburbs there have been 133 million-dollar-plus sales so far this year. In regional Victoria there have been 30.

So far this year Victorians have spent $5,799 million buying homes – with about $2,430 million, or a bit less than half of that total – on million-dollar-plus homes. 
As these results show, there continues to be strong activity at the top end of Melbourne's housing market as buyers look to secure a more impressive home in a key location - across Melbourne’s middle, inner and even outer areas.