Australia’s high end property markets have experienced significant price falls, placing the nation’s more affordable markets in a positive position.
According to results from RP Data, covering the March 2011 quarter, the median house price across the combined capital cities is now $478,000.
With 20 per cent of the most expensive capital city suburbs recording a fall in values of 5.4 per cent over the 12 months to April 2011 - compared with a 0.5 per cent fall at the most affordable end and 0.9 per cent decline across the broad middle 60 per cent of the market.
Perth’s prestigious riverfront suburb, Mosman Park, was the hardest hit, experiencing a 43.1 per cent drop in its median house prices since peaking back in August 2008.
RP Data’s research analyst Cameron Kusher said while the low number of transactions during the quarter affected the results in Mosman Park, there is no doubt that demand and prices in the region have declined.
Across the 25 council areas within the capital cities with the greatest fall in median prices, 17 of the regions had a median house price which was greater than $1 million at their respective peaks.
By the end of the March 2011 quarter, only 12 of these regions had a median house price in excess of $1 million.
In contrast, in all of Australia’s top 25 performing growth suburbs, not one had a median house price greater than $1 million.
“Today’s analysis certainly supports the broad trend that indicates that the weak performance of the premium sector of the market is having a significant impact on the overall market and subsequently sentiment also,” Mr Kusher said.
“The premium sector is being impacted by a perfect storm of forces, such as consumer conservatism, higher interest rates, poorly performing equities markets (both in Australia and nationally), unstable global economic conditions and lower levels of business and consumer confidence.
“With subdued residential property markets likely to persist over the next year, we anticipate that the premium segments will continue to underperform.”