What it'll cost you to live in Australia's most expensive suburbs

What it'll cost you to live in Australia's most expensive suburbs

New data has revealed the country’s costliest neighbourhoods, with many of them having seen home values skyrocket over the past 12 months. PropTrack has released its latest quarterly automated valuation model (AVM) to the end of September, showing there are 88 suburbs where homes come in above $3 million. An AVM combines mathematical modelling with the latest price data and recent comparable sales to give the most accurate estimate of the price of properties in a particular area.

According to the PropTrack data, the most expensive suburb in the country is Bellevue Hill in Sydney’s eastern suburbs, dominated by grand estates and heritage manors, with a house AVM of $8.42 million. Local agent Oliver Lavers from TRG said the area is one of the most sought-after in the country, combining world-class real estate with priceless views, a convenient location, and prestigious schools. “It provides the ultimate lifestyle opportunity,” Mr Lavers said. A lack of supply and the suburb’s high desirability have somewhat insulated it from a broader market cooldown when it comes to prices, he added. “Everyone knows there has been a general shift in the market over the past 12 months, however the upper end of the housing market, including Bellevue Hill, hasn't shifted and remains strong.”

PropTrack’s data shows Bellevue Hill’s AVM has increased slightly in the past quarter, up 0.45%, and has surged by 13.1% in the past year.
Mr Laver recently sold 2D Tarrant Avenue, a European-style manor with six bedrooms and six bathrooms across 700sqm of living space, sitting on a 1000sqm block, and boasting epic city views.

The sale price hasn’t been disclosed but TRG was guiding $13 million when they took on the listing and Mr Laver said there were “multiple bidders and it sold within three weeks”.

Sydney leads the pricey pocket stakes

While Bellevue Hill came out on top in the data, Sydney’s actual most expensive suburb is considered to be the exclusive Harbourside enclave of Point Piper. So tightly held are the mega mansions in this part of town that getting an accurate AVM isn’t possible due to the low number of sales. Point Piper is home to billionaire Atlassian boss Mike Cannon-Brookes, who shelled out $100 million for his historic home, Fairwater, and his business partner and company co-founder Scott Farquhar, who bought the Elaine estate for $71 million.
Point Piper does feature in PropTrack’s most expensive list for units, with an AVM of $5.2 million, putting it at 10th spot nationally. A recent sale indicating the types of high-end apartments on offer is 5/23 Wolseley Road, a brand-new unit with three bedrooms, every possible modern convenience, and jaw-dropping views of the city skyline, Opera House, Harbour Bridge, and water. The home, one of just six in the boutique complex, fetched a tidy $16.5 million in March.

Vaucluse ranks second on the country's most expensive list, with a house AVM of $8.08 million, which is up 2.15% in the past quarter and 13.2% higher year-on-year. It’s followed by Dover Heights on $6.6 million, up 3.8% quarter-on-quarter and 12% higher in the past year, then Double Bay on $6.3 million, up 0.3% in the past three months and 9.11% year-on-year. The entirety of the top 10 list is made up of Sydney suburbs, mostly in the eastern part of the city.

But slightly further afield, the pristine pocket of Palm Beach on the northern beaches came in at 7th on the most expensive list with a house AVM of $5.5 million. Local agent BJ Edwards from LJ Hooker what was once a humble and sleepy fishing village has grown into one of Australia’s most desirable seaside destinations. “It’s where many of Sydney’s top wheelers and dealers come to play,” Mr Edwards said. “The upper northern beaches is the epitome of Australian beach life that folks from far-off places can only dream about. 'Palmy' is as much a weekend getaway as it is a place to call home.”

Buyer demand has eased in the past several months on the back of rising interest rates and reduced borrowing capacity, with some of the heat coming out the local market, he said. “Since the beginning of the year, some areas along the Northern Beaches have seen significant changes and prices have quickly dropped between 5% and 15%,” Mr Edwards said. “The Palm Beach market appears somewhat insulted from that downturn.” Indeed, the PropTrack AVM data shows a 3% decline quarter-on-quarter, while the year-on-year AVM has slipped marginally by 0.5%.

Australia’s 10 most expensive suburbs

Melbourne’s most expensive suburbs

Sitting just one place outside the national top 10 list is the famed Melbourne suburb of Toorak, with a house AVM of $5.13 million. Bucking the broader market cooldown trend seen elsewhere, that AVM has increased by 1.1% in the past three months and is 3.89% higher year-on-year.

The city’s second most expensive neighbourhood is a bit further from the heart of Melbourne, about 100km down the road. Portsea on the Mornington Peninsula became an escape for the rich and famous during the long and lonely Covid era. That heightened demand pushed its eyewatering home prices even higher than they were. The latest PropTrack data shows a house AVM of $3.76 million, which has slipped 3.97% quarter-on-quarter but is still 11.4% higher than a year ago.

“Portsea is a unique market,” local agent Geoff Hall from RT Edgar said. “Traditionally the playground of Melbourne's rich and famous, many of the trophy properties along the Cliff front have been in the same family for generations. “As such the area is tightly held and stock turnover is substantially lower than other Peninsula postcodes.”

When rare waterfront homes do come to market, they’re often hotly contested – regardless of what the market is doing – and sell quickly, he said. The market remains solid and underlying demand is still strong, although turnover has been limited recently. “Portsea buyers are quite specific with their buying criteria,” Mr Hall said. “They are typically attracted to the larger land holdings and want that full resort-style holiday home with a court and pool.”

Other highlights from the data
While they were pushed down by Sydney’s plethora of high-priced suburbs, there are some notable appearances in the list elsewhere in Australia. Take Peppermint Grove in Perth, which is Western Australia’s most expensive suburb and 18th overall in the country, with a house AVM of $4.35 million.

That’s increased by 3.1% quarter-on-quarter and a whopping 12.1% year-on-year, reflecting the continued strength of the Perth market in 2022 compared to eastern cities. Sunshine Beach in Queensland was the state’s most expensive suburb, and 73rd in the country, with a house AVM of $3.1 million. That’s surged by a mammoth 34.1% in the past 12 months, on the back of strong interstate migration and rising demand for prestige properties on the Sunshine Coast. Although, it has slipped back 4.58% quarter-on-quarter.

Meanwhile, New Farm is Brisbane’s most expensive suburb with a house AVM of $2.76 million, up a whopping 34.9% year-on-year but down marginally by 0.5% in the past quarter. South Australia's most expensive suburb is Toorak Gardens in Adelaide's inner east, with a house AVM of $2.116 million, up 13.1% year-on-year, but down 0.8% in the past quarter.
The exclusive and tightly held pocket is known for its tree-lined, wide streets full of character homes, all just 4km from the CBD, local agent Stephanie Williams from Williams Real Estate said. “Toorak Gardens offers highly desirable and beautifully improved character homes, which are sited on generous allotments, together with a wide range of new contemporary residences,” Ms Williams said. “This premium location is highly desirable to buyers as it has excellent proximity to the CBD, walking distance to Victoria Park, close to The Parade Norwood, The Burnside Village, Dulwich Village, and prestigious schooling, including Pembroke College, St Ignatius College, St Peters College and Prince Alfred College.”

Griffith in Canberra is the national capital’s priciest pocket with a house AVM of $2.46 million, up 3.77% in the past quarter and now 17% higher year-on-year. Local agent Stephen Thompson from LJ Hooker said interest in the historic suburb has never been higher. “Buyers are realising that Griffith is not only enjoyable but also the most convenience suburb out of all other inner-southern locations,” Mr Thompson said.

What lies ahead for prestige property
The two regions to see the greatest price falls in the past several months are Sydney’s eastern suburbs northern beaches, PropTrack senior economist Eleanor Creagh said. And those are the two areas where most of Autralia’s priciest properties can be found. “Interest rates have risen quickly this year and as borrowing capacities are constrained and buyers’ budgets shrink, Sydney is feeling these effects,” Ms Creagh said. “Many potential buyers have seen their budget shrink and that’s dampening demand for high-end housing, with sales falling as the pool of people qualified to purchase luxury properties is shrinking.”

Typically, the upper end of housing markets sees more volatility and larger price declines during market downturns, she said. “This cycle is no different. At the moment, it’s the regions that are home to more expensive properties that have seen bigger price falls than more affordable properties. “However, as the spring selling season has unfolded, the pace of price falls has slowed from the faster falls seen over the second quarter of this year when interest rates first started rising.”

The AVM calculation explained

An automated valuation model (AVM) is a statistically derived estimate of the value of a given property. AVMs use advanced data analytics and mathematical models, such as machine-learning, to analyse a suite of available data points for a given property to accurately estimate its value on a given date. At realestate.com.au, and with PropTrack, we use many different data points and algorithms to automate a value estimate for the local market. Combining advanced predictive modelling with unique proprietary data and industry expertise, our valuation tool delivers estimates for more than 80% of residential properties in Australia.

credits to Shannon Molloy, News Editor, realestate.com.au/news