The number of homes selling for at least $2 million has trended substantially higher over recent years which has largely been driven by the Sydney and Melbourne housing markets.
While a home selling for or in excess of $1 million was once the domain of the wealthy and indicative of the luxury housing market, sales of or in excess of $1 million are becoming much more regular. Over recent years there has also been a substantial rise in sales of homes at or above $2 million however, they remain a much smaller proportion of overall sales than sales between $1 million and $2 million. Perhaps $2 million is the new $1 million?
Over the 12 months to June 2016, there were 11,319 houses and units sold nationally for at least $2 million. As the first chart shows, there has been some decline over recent months however, this could also be reflective of some transaction details having not yet come through. Over the previous 12 months, there were 10,668 dwellings sold for at least $2 million, 10 years earlier there were 3,254 sales and 20 year earlier there were just 236 sales.
Looking at the split between houses and units nationally, there were 9,882 houses and 1,437 units sold for at least $2 million over the past year. As the chart shows, the number of units selling in excess for at least $2 million is still lower than its peak in late 2007. It should be noted that the data is based on settled sales so does not include yet to settle off-the-plan unit sales. Once settled, they will be included in the data at their contract date.
The third chart highlights the number of sales of at least $2 million for New South Wales and Victoria versus the other states and territories. The surge in sales at that price point has largely occurred in the two largest states. In fact, in the other states and territories the number of sales of at least $2 million is still lower than the previous peak.
It is a similar story when looking at sales of or in excess of $2 million in Sydney and Melbourne compared to the other capital cities. Sales at this price point have surged substantially higher across the two largest capital cities over recent years while they remain lower than their previous peak across the combined other capital cities. Over the 12 months to June 2016, there were more units sold for at least $2 million in Sydney and Melbourne than houses sold above that price point across each of the other capital cities.
Sales of properties at a price point above $2 million are becoming a much more regular occurrence in Sydney and Melbourne while they are much rarer elsewhere in the country. This is just another example how the cost of housing in our two largest capital cities is detaching itself from the rest of the country.