Dr Powell said the rampant house price growth has redefined the concept of a premium property or location, and it showed the extent to which buyers were willing to pay for land and lifestyle.
“A $2 million median is a huge milestone for a suburb to reach, but with Sydney, Melbourne and Canberra now having above $1 million median house price, a $2 million house is now considered an entry-level premium home,” she said.
“A million-dollar home is now the norm across Sydney, so I think a $2 million price point isn’t necessarily the very high end of the market, like it once was.”
Sydney upper north shore selling agent Bronwen Lipscombe, of DiJones Wahroonga, said a $2 million house in the area has become the most competitive segment of the market.
“Realistically, you can’t buy a good house in a decent area with a $2 million budget; you will have to opt for an older house in a less desirable street,” she said.
“But there are a lot of buyers coming to us with budgets under $3 million, so there’s plenty of competition for houses in this price range.
“These buyers want a house with lots of space because they know that going forward, even when lockdown eventually comes to an end, chances are that they’ll be working from home at least some of the time, and that means they need an extra room to function as an office space.”
Nerida Conisbee, Ray White chief economist, said there were now 145 suburbs worth more than $2 million across the country amid the surging house prices.
“A million-dollar home is now considered inexpensive, so you could say that $2 million is the new $1 million at a national level,” she said.
Dr Powell said the rise of the $2million suburbs in the middle ring meant upgraders would now need to look further afield to buy a house.
“You can see the impacts on other suburbs; ultimately it prices buyers out of a certain area, so buyers can opt to purchase a unit, or buy in the next suburbs, which in turn lifts values in these market segments,” she said.
The ripple effect is most evident in the once affordable suburbs where house prices are now on the verge of hitting the $2 million mark.
Those markets include Sandringham in Melbourne, Mermaid Beach on the Gold Coast and Byron Bay on NSW’s north coast.
Closer to the city, Eastwood, Epping and Beacon Hill in northern Sydney, Bella Vista in the north-west and Matraville in the eastern suburbs were all poised to hit the $2 million median house price in the next few months.