The number of houses that sold for less than $400,000 across Australia has fallen to 31.2 per cent, down from 62.4 per cent in 2007, CoreLogic reports.
Additionally, units sold for less than $400,000 have fallen from 68.9 per cent of total units sold in 2007 to 37.3 per cent. A year ago, 32.8 per cent of houses across Australia and 38.6 per cent of units sold transacted for less than $400,000.
CoreLogic research analyst, Cameron Kusher noted that in the combined capital cities nearly 17 per cent (16.8 per cent) of houses and 28.4 per cent of units sold below the $400,000 threshold. In the year to June 2007, those figures were 53.1 per cent for houses and 66.3 per cent for units. Going back to 1997, houses transacted under the threshold made up 95.0 per cent and units 96.7 per cent.
“Even comparing these [capital city] figures to just a year earlier the decline in the proportion of sales under $400,000 is extremely noticeable for houses (19.0 per cent) and somewhat less so for units (29.6 per cent). A decade ago, more than half of all capital city houses and units were less than $400,000,” Mr Kusher said.
Australia’s combined regional areas reported higher figures. Fifty-two per cent of houses and 60.5 per cent of units sold under the threshold in the year to June 2017, compared to 54.3 per cent and 63.2 per cent the year prior. A decade earlier 75.6 per cent of regional houses and 75.2 per cent of units sold for less than $400,000.
“As dwelling values continue to increase, we anticipate that over the next 12 months the proportion of properties selling for less than $400,000 will further reduce and in the way that the rising number of sales of properties for at least $1 million shows the deteriorating affordability, so too does the significant reduction in the availability of properties priced under $400,000,” Mr Kusher said.
Buyers with a $400,000 budget will find the Sydney market the most difficult, with just 7.4 per cent of units and 3.1 per cent of houses selling for prices within their budget in the year to June 2017. Those seeking houses in Canberra will face a similar dearth, with 3.4 per cent of houses selling for less than $400,000. Twenty years ago that figure was 98.1 per cent and ten years ago 40.0 per cent.
Hobart offers the most options, with 53.2 per cent of houses and 78.3 per cent of units selling for less than $400,000 in the year to June 2017.
Mr Kusher called on the federal government to increase supply of housing stock but noted that increased supply would need to be supported by sufficient infrastructure and employment opportunities.
“Although the federal government attempted to address housing affordability in the budget this year, in order to improve housing affordability, clearly there is much more work to be done on both supply and demand drivers of the market.”