DISCLOSED: The affluent Australian neighbourhoods where property values are falling, and the unexpected locales where values are soaring.
In August, the median price of a home on Sydney’s northern beaches fell 4.3%.
In just one month, the neighboring north coast had a 3.2% decrease.
In the far north of New South Wales, the Richmond-Tweed region had a 5.5% decline.
By Stephen Johnson, Daily Mail Australia Economics Reporter
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As interest rates continue to rise, affluent districts near the beach and sea change zones are experiencing the steepest declines in home prices.
The Reserve Bank of Australia increased interest rates by an additional 0.5 percentage points on Tuesday, resulting in the largest decline in national real estate prices since 1983.
This brings the cash rate to a seven-year high of 2.35 percent, up from a six-year high of 1.85 percent, and will add $173 to the average $600,000 mortgage payment each month.
Postcodes in affluent areas are more vulnerable to cash rate hikes, as the RBA has already raised rates in May, June, July, and now September – the fastest pace since 1994.
As interest rates continue to rise, affluent districts near the beach and sea change zones are experiencing the steepest declines in home prices.
The median property price on Sydney’s northern beaches fell 4.3% in August to $2,385,114, according to CoreLogic statistics (pictured is Manly)
The median property price on Sydney’s northern beaches fell 4.3% in August to $2,385,118, according to CoreLogic statistics.
Where home prices are falling as interest rates climb.
RICHMOND-TWEED, New South Wales: down 5.5% to $963,737
SYDNEY NORTHERN BEACHES: decreased by 4.3% to $2,385,118
WARRNAMBOOL, Victoria: a decrease of 3.7% to $545,901
SYDNEY NORTH SHORE: a decrease of 3.2% to $2,740,933
CENTRAL COAST, NSW: a decrease of 3.2% to $965,244
Over the past three months, home values in this region, which stretches from Manly to Palm Beach, have dropped by 9.9 percent.
The median property price on the neighboring north shore decreased by 3.2% in August, bringing it back to $2,740,933, and by 7.6% over the course of three months.
Sea change locations within an hour’s drive of Sydney are also sliding, with the median property price on the Central Coast down by 3.2% last month and 7.5% for the quarter to $965,244.
This region includes the suburbs of Gosford and Woy Woy, as well as the upscale seaside communities of Terrigal and Avoca.
The median house price in the Richmond-Tweed region, which encompasses Byron Bay and Ballina, decreased by 5.5% last month to $963,737.
This region, which is approximately two hours by car from Brisbane, experienced an 8.8% reduction over the course of three months.
It was by no means the only regional coastal market to suffer, with Warrnambool in south-west Victoria down 3.7% to $545,901 in August.
The typical property price in the Richmond-Tweed region, which includes Byron Bay (pictured) and Ballina, fell by 5.5% to $963,737 in month on the far north coast of New South Wales.
The typical price of a house or apartment in Australia fell by 1.6% last month, the largest drop since January 1983.
A buyer of a typical property, currently worth $738,321, would likely have a 20% down payment for a $590,666 mortgage.
This is currently out of reach for a full-time worker with an average salary of $92,000.
A Canstar research revealed that in April, before the RBA raised rates for the first time since November 2010, a person earning $96,300 per year could borrow $600,000.
The same potential borrower would now only be eligible to borrow $500,000, as banks would be compelled to evaluate an individual’s ability to handle a three percentage point increase in variable mortgage rates.
Despite rising interest rates, certain regions continue to defy the trend and experience historic house price growth.
The median property price in the north of Adelaide increased by 0.9% to $568,599 last month, and by 4% over the past three months.
The South Australian Outback had a 1.8% increase in August and a 3.6% quarterly gain, bringing the median house price to $252,952.
In August, the median property price on the mid-north coast of New South Wales increased by 0.6% to $831,665, at least in the Coffs Harbour to Grafton region.
The median house price in Adelaide’s north increased by 0.9% to $568,599 last month, and by 4% over the past three months (shown is a home in Salisbury).
What a 0.5% increase in interest rates actually means
$50000: $145 increase to $2,472 from $2,327
$600,000: $173 increase to $2,966 from $2,796.
$700,000: An increase of $202 to $3,460 from $3,258.
$800,000: $231 more at $3,955 than $3,724
$9,000,000: $260 increase to $4,449 from $4,189.
$1,000,000: $289 more at $4,943 than $4,654
According to calculations based on the cash rate increasing to 2.35 percent from 1.85 percent, a common Commonwealth Bank variable would increase to 4.29 percent from 3.79 percent.