Widespread concerns about the poor affordability of Australian housing have been vindicated by the release of new data showing a surge in the number of suburbs across the country with a median home price in excess of a million dollars.
The demise of the mining boom several years ago has done little to dull the housing boom's momentum, with the latest slew of figures from property data firm CoreLogic indicating that the number of million dollar suburbs in Australia has more than doubled in just the past three years alone.
While just three years ago in 2013 the number of Australian suburbs with median home values in excess of a million dollars was 264, CoreLogic's data indicates that this figure has since leapt to 570.
From the GFC in 2008 to 2013 the number of million dollar suburbs in Australia had hovered around the 250, with the boom in expensive residential districts really taking off in 2014.
The drop in housing affordability has been worst in the country's most populous urban centres of Sydney and Melbourne.
"The data highlights the bracket creep that has occurred over the housing growth cycle, and how housing affordability in New South Wales (Sydney) and to a lesser degree Victoria (Melbourne) has deteriorated," said Camerson Kushner, a CoreLogic research analyst, in the report.
Australia's million dollar suburbs are concentrated primarily in New South Wales, which is host to 68 per cent of such suburbs, as well as Victoria, which lays claim to nearly 17 per cent. These figures further indicate that Australia's premium residential areas have become more concentrated in New South Wales and Victoria since 2008, when the two states hosted 60 per cent and 14 per cent of the country's million dollar suburbs respectively.
While concerns about housing affordability in Australia have prompted the banks to tighten lending, the Reserve Bank of Australia's recent decision to reduce benchmark interest rates to a record-breaking low of 1.5 per cent is expected to keep property prices buoyant, and spur further growth in the ranks of million dollar suburbs over the next twelve months.
“While overall housing demand may be slowing a little, we expect that with historic low interest rates, demand for premium housing is set to remain buoyant over the coming year," said Kushner.