The ‘Rich List’ of Australian real estate.

The most expensive suburbs list has all the usual suspects, but there are a few surprises.

This week we have put together the rich list for Australian real estate. Based on the median value of houses within suburbs across Australia we have identified the most expensive locations to own a house.

The analysis is based on median values rather than median prices. RP Data estimate the value of virtually every residential property across the country; taking the middle ‘value’ for each suburb provides a much more reliable indication of what a buyer is likely to pay for the typical house within a suburb, compared with the median price which is based on only those homes that have sold during the period.

Suburbs on the Rich List show quite a few factors in common. They tend to be close to the CBD; if not they are close to the water. Houses within the suburbs often have heritage value and are perched on larger blocks of land. In many of the suburbs, detached housing is scarce, with apartments and townhouses being more common.

As most would expect, Australia’s most elite real estate markets are clustered around Sydney’s harbour side suburbs.

Point Piper tops the list with a median value of $7.382 million. If you own a house in Point Piper you have truly made it. Based on ATO taxation statistics, Point Piper average incomes are the highest in the nation, averaging just over $182,000. The suburb also has a very high rate of home ownership; according to the Census there are only 148 detached houses in the suburb of Point Piper and 57 percent of them are owned outright (ie without a mortgage).

Across each of the states and territories, the most expensive suburb is typically located within close proximity to the CBD, with the exception being Main Beach in Queensland. The Gold Coast suburb of Main Beach is Queensland’s most expensive suburb for houses, a factor which is assisted by the absolute scarcity of houses compared with units in the suburbs. There are only 88 detached houses within the suburb, equating to just 5.9% of all dwellings.

Across the top 25 most expensive suburbs nationally, only three are further than 10km from the capital city CBD. One of these exceptions is Western Australia’s ‘Eagle Bay’, located along the south west coastline close to the Margaret River region, where the median house value is $2.86 million and the most expensive home currently on the market is priced at $10.5 million.

The only state where it costs less than an average of $1 million to buy into the most elite housing market is Tasmania. The inner city suburb of Battery Point has a median house value of $861,560 placing the suburb at position 365 on the ‘Rich List’.

Of course, the vast majority of Australian’s can’t afford to buy, or for that matter, rent in these suburbs. In fact, the population living within the most expensive 25 suburbs accounts for just 0.5% of Australia’s population.

Having said that, with four consecutive months of growth it is safe to say the Australian housing market has moved into a recovery phase with Sydney and Melbourne now the two cities leading the way with values up 4 per cent respectively since the end of May.

The Reserve Bank’s October rate cut is likely to provide further stimulus to the housing market and it will be important to monitor how consumers respond to the more affordable housing environment. The RBA will undoubtedly be aiming to find the sweet-spot in their monetary policy that keeps a lid on housing prices while ensuring financial stability.

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