According to research by RP Data, the top end of the property market suffered a significant fall in median house prices in the March quarter 2011, while the most affordable suburbs held their ground.
Median values at the affordable end of the market fell just 0.5 per cent in the 12 months to April 2011, while the middle 60 per cent of the market softened 0.9 per cent.
By comparison, 20 per cent of the most expensive capital city suburbs recorded a 5.4 per cent fall in value over the year.
RP Data research analyst Cameron Kusher said the weak performance of the premium sector was having a significant impact on the overall market and sentiment.
‘‘The premium sector is being impacted by a perfect storm of forces such as consumer conservatism, higher interest rates, poorly performing equities markets, unstable global economic conditions and lower levels of business and consumer confidence,’’ Mr Kusher said. ‘‘With subdued residential property markets likely to persist over the next year, we anticipate that the premium and most affordable segments will underperform.’’
Mr Kusher said interest rate rises were likely to impact lower income households and dampen demand among the most affordable sector.
The March quarter RP data showed the highest median price among the 25 best performing capital city regions was $850,000 in Sydney’s Botany Bay.
More than half of the 25 best performing capital city regions had a median house price under $500,000. The median house price across the combined capital cities was $478,000.
The worst performing suburb was Mosman Park, a prestigious waterfront area of Perth, which has suffered a 43.1 per cent fall in median house prices since peaking in August 2008.
Perth now holds nine of the worst performing council regions, followed by Sydney with seven, Adelaide, Hobart and Melbourne all with three.
Across all capital cities, just 14 areas had median house prices still at an historic high.
Source: The Age Domain