Report: Newcastle and Lake Macquarie suburbs where median values fell below $1 million

That's according to CoreLogic's Million Dollar Market report which details the suburbs where median house values fell below $1 million in the past year.

Swansea, New Lambton and Warners Bay are the hardest-hit suburbs in the region alongside Tighes Hill, New Lambton Heights, Lambton, Maryville, Fern Bay, Broadmeadow, Carrington, Adamstown and Wyee Point where values dropped to under $1 million compared to 12 months ago.

In Swansea, the median house value fell 16.1 per cent from $1,034,437 to $867,665.

New Lambton's median house value dropped 13.5 per cent from $1,112,230 to $962,436 and Warners Bay recorded a loss of 12.2 per cent in values from $1,034,872 to $908,850.

Margaret Jensen from New Lambton-based agency Crawford Real Estate said the New Lambton area remained a sought-after suburb, however, she noted there had been a shift in prices over the past 12 months.

Ms Jensen said they were selling knockdown properties in the area for more than $1 million a year ago.

"I was getting exceptional prices in the area this time last year but there was more competition for the properties and that's the big difference," she said.

"Knockdowns were going for well over a million in the suburb a year ago but with that side of things with developers, the demand has eased off.

"It is still true that a lot of people wouldn't consider the area affordable but it is more affordable than it was a year ago."

In the Hunter Valley (excluding Newcastle), Anna Bay, Bolwarra, Bolwarra Heights, Salamander Bay and Wattle Ponds were the five suburbs where median house values fell below $1 million in the past year.

CoreLogic Economist Kaytlin Ezzy said 237 house markets and 19 unit markets across Australia had median values fall below $1 million in the past year.

In 2022, CoreLogic's Million Dollar Market report featured a record number of house and unit markets at the suburb level with a median value of $1 million or more.

However, after one year and 12 interest rate rises, many of last year's new entrants now fall below the million-dollar mark.

As of May 2023, 988 (22.3 per cent) of the 4,436 house and unit markets analysed nationally had a median value at or above $1 million, down from 1,243 or 28 per cent this time last year.

"Over the year, the number of million-dollar markets in the Central Coast halved from 33 to 17, while house values in 33 suburbs across the South West, Outer South West and Outer West and Blue Mountains regions fell below the $1 million mark," Ms Ezzy said.

"A similar pattern was seen in Brisbane and across some of regional Queensland's commutable lifestyle markets, including the Sunshine Coast and Gold Coast as well as the Regional NSW markets of Newcastle and Lake Macquarie, Illawarra and the Southern Highlands and Shoalhaven.

"These regions benefited greatly through the COVID upswing, with flexible working arrangements, lifestyle benefits, and relative affordability, all of which made them attractive options for buyers.

"However, the COVID surge in values also made these markets more sensitive to the rising cost of debt, with many recently minted million-dollar suburbs falling below the seven-figure mark."

Between April 2022 and February 2023, CoreLogic's national Home Value Index moved through the sharpest decline on record, falling 9.1 per cent in 10 months.

Housing values in Newcastle and Lake Macquarie recorded 1.8 per cent growth over the past three months, however, values are still 8.9 per cent lower than their peak in April 2022.

Ms Ezzy said while the decline in seven-figure markets might be disappointing news for some homeowners, she noted that many markets are still recording values significantly higher than at the start of the pandemic.

"Despite the decline in the number of million-dollar markets across Australia, the portion of properties selling for $1 million or more has actually held fairly steady over the year to March at almost one in four properties, suggesting high-end buyers are still active in the market," she said.

"The cash rate will have an impact on the performance of million-dollar suburbs.

"Historically, increases in the cash rate have put downward pressure on market values and many economists and banks have lifted their forecast for where rates might peak following June's increase.

"It's likely this will delay the return of some house and unit markets to the million-dollar club."

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