Melbourne’s mansions are bearing the brunt of the property market correction.
Sales among the city’s most elite addresses — the top end of Toorak — have come to an “absolute stop”, according to industry insiders.
And new CoreLogic figures show the top 25 per cent of the city’s houses — those above $1.011 million — have lost a median $170,000 (14.4 per cent) in the past year.
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By comparison, a middle-range house in the city — valued at about $730,000 — has lost about $95,000 (11.5 per cent).
CoreLogic Australian head of real estate Geoff White said the figures showed a particular subset of Melbourne’s homeowners had “shouldered the downturn”.
“Owners of $1-$3 million homes are the ones who have felt it more than others,” Mr White said.
The correction has largely been driven by tougher lending conditions and banks cutting back what they are prepared to loan.
Those with homes above $4-$5 million were less likely to be affected, as most buyers at that level were not reliant on a loan to make the purchase, Mr White said.
But top-end buyer’s advocate David Morrell said the city’s elite home market — houses above $5 million — was seeing fewer sales and listings now than during the global financial crisis.
“Winter isn’t coming, winter is here,” Mr Morrell said.
“There wouldn’t even be a handful of sales a week. It’s just come to an absolute stop.”
Neither CoreLogic nor realestate.com.au have recorded a sale above $10 million in Toorak this year.
But there are some signs the top end isn’t completely dead, with the recent $6.3 million sale of Boost Juice founder Janine Allis’ Malvern East home — $600,000 above expectations — the first that’s “really flown” this year, according to Mr Morrell.
He said it was possible the top end could yet lead the city out of the correction, as a changing tax environment made investment properties less desirable, prompting the wealthy to invest their money in higher-priced family homes where it couldn’t be taxed.
But Mr White said it would be the middle and bottom end of the market that would end Melbourne’s market woes, potentially before the end of the year.
Rising confidence following the federal election would be key in either case.
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And there are already positive signs, with Melbourne’s auction clearance hitting a six-month high at 55 per cent last weekend.