The list of the most exclusive suburbs in each state reiterates just how much more expensive real estate is in Sydney relative to the rest of the country.
Sydney is by far and away the nation’s most expensive housing market. To put this into some perspective we have looked at the top decile of selling prices over the three months to January 2016. A decile simply divides a group into ten equal parts. What this means is if there were 20 sales over the three months and we lined the sales up from lowest to highest we would take the 18th price as a representation of the most expensive segment of the market.
Over the three months to January 2016, the 90th percentile price of a house in the city was $1.5 million and the 90th percentile unit price was $980,000. Over the same period, the two capital cities with the next highest 90th percentile house price was Melbourne at a still high but much lower $1,050,000. This highlights just how much more expensive housing is in Sydney and to a lesser degree Melbourne is relative to other capital cities. As an example the next highest 90th percentile price is Perth at $870,000.
There is also a large difference between the cost of premium housing in capital cities and non-capital cities. The 90th percentile house price across the combined capital cities is $1,010,000 compared to $675,000 in combined regional markets. Similarly, 90th percentile unit prices are $830,000 in the combined capital cities compared to $600,000 outside of the capitals. This data points to the fact that non-capital city areas are the great un-tapped resource for more affordable housing. Of course employment opportunities in these areas are the main factor holding back the regional areas of the country.
The table below highlights the five most expensive suburbs for both houses and units in each state. The data is based on median values and we have only included suburbs that had at least 10 sales over the 12 months to January 2016.
The Sydney premium becomes very evident when we look at the most expensive suburbs in each state based on median values. The data shows the 5 most expensive suburbs for houses in NSW (all of which are in Sydney) all have a median value of more than $4 million. In comparison, the most expensive suburbs for houses in Vic and WA are more than $3 million, in SA it is more than $2 million, in Qld, NT and ACT it is more than $1 million and in Tas it is less than $850,000.
Similarly for units, all of the 5 most expensive suburbs in NSW (Sydney) have a median values of more than $1 million. Tennyson in Brisbane is the only other suburb outside of Sydney with a median unit value of more than $1 million.
There is a large premium for housing in our largest city. Of course the city also has an abundance of waterfront homes which contributes to the higher overall cost of housing. While employment opportunities remain significant in Sydney and employers limit the opportunities for workers to work remotely we would expect that a substantial Sydney premium will remain. Elsewhere housing is generally much more affordable but of course not everyone has a choice when it comes to potentially leaving Sydney and heading to another area of the country where housing is cheaper.