Across the capital cities and based on all sales recorded over the 2012 calendar year, 31% of house sales and 46% of unit sales were transacted at a price below $400,000. Aggregating the figures together for dwellings shows that about 34% of all capital city homes sold for less than $400,000 over 2012. As you can see in the table below though, the largest proportion of these sales was in Hobart where 67.6% of all house sales and 82.5% of all unit sales were priced under $400,000. Similarly, Adelaide recorded 49.7% of all house sales and 70.7% of all unit sales with a sale price lower than $400,000. Maybe not so coincidentally, not only are these Australia’s most affordable capital cities, but Tasmania and South Australia are also showing the highest rates of unemployment.
At the other end of the spectrum is Canberra where only 8.6% of house sales were priced lower than $400,000. Detached house sales under $400,000 were also comparatively rare in Darwin (23.0%) and Sydney (24.7%).
The city with the largest premium (ie $2 million plus) is Sydney where 3.0% of all house sales were priced at $2 million or higher and just shy of 1% of Sydney units were at this price or higher.Click to enlarge
Outside of the capital cities, housing prices are typically much lower. Take Newcastle, one of Australia’s largest regional cities, as a case in point. The median house price at Newcastle is $395,000, compared with Sydney’s $660,000, and the median unit price is $340,000 compared to $489,000 in Sydney. Some 51% of houses sold over the past year were at price points below $400,000, and 68% of unit sales were priced lower than $400,000.
As far as housing affordability goes, the vast majority of regional cities provide a substantial saving on the cost of housing compared to the capital cities. The drawback to many of these areas, though, is that job opportunities are often scarce. If we saw more government and private sector businesses choosing to locate their headquarters in regional locations, the labour market conditions would an improve and it would be easier to attract new residents.
A series of thematic maps provides some geographic context. Areas shaded in the red have recorded at least 80% of house or unit sales at a price below $400,000 over the 2012 calendar year. The concentric circles mark the 10-kilometre, 20-kilometre and 50-kilometre points from the capital city GPO. The white space on the maps is typically areas where the number house or unit sales are either very low or non-existent.
The spatial trends are pretty clear and should come as no surprise. The vast majority of affordable sales are generally located in the outer fringes, with very few suburbs showing a high proportion of house sales lower than $400,000 within 20 kilometres of the city. This trend is particularly the case in the larger capitals, although there are a few exceptions. The proportion of unit sales priced under the $400,000 mark show an improvement in proximity, demonstrating the more affordable price points that medium and high density housing options provide.
Tim Lawless is national research director of RP Data.