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Budget Oz suburbs see surge in property sales

While some analaysts are tracking the decline of the million dollar suburb as property values in some of the country's most prestigious areas slump, real estate owners in outer city areas are making massive gains, it is claimed.

Suburbs such as Mansfield Park and Ottoway, in Port Adelaide Enfield, and Caboolture, north of Brisbane, all had capital gains of more than 20% in the 12 months to May on properties selling for under $350,000, according to figures from RP Data.

Property sales in these areas have been boosted by the government's first home buyer grant which was due to end in June but has just been extended for a second time.

The grant will continue at its present level of $21,000 for new homes and $14,000 for existing homes until the end of September. It will then be stepped down to $14,000 for new homes and $10,500 for existing homes until the end of the year. From January 1 next year, the first-home buyer's grant will revert to its original level, which is $7000 for new and existing homes.

This will boost the lower end of the market even further. According to RP Data suburbs that have previously been unpopular are booming. Low interest rates and people opting for smaller mortgages and smaller homes are also adding to the boom in these locations, said analyst Cameron Kusher.

But the company's data shows the opposite effect at the other end of the market. In the last year there has been a slump in the number of suburbs with a median property price of $1 million or more.

In the year to February, the number of million-dollar suburbs slipped from 151 to 134, with New South Wales experiencing the greatest slump as eight of its suburbs dropped off the list.

'Not a lot of people are looking to spend $1 million on property at the moment. The people who do have that money to spend know that there are not a lot of people in that position, so they can take their time and look around,' said Kusher.

Perth suburbs recorded the greatest overall fall in value, with the six suburbs dropping off the list recording an average 26.4% plunge in value, the figures from RP Data shows.

The shift in property values was not typical of recessions, Kusher said. 'The million-plus market is something that has been sheltered from economic downturns previously. The shift we've seen in the past 12 months is a real change,' he added.

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