I’m not surprised to hear the median price has gotten so high.  Obviously higher end sales bring the median up, and we are seeing a lot of activity in the $1M+ range.  In fact in the last 12 months, we have sold a $1M+ property every 1.7 weeks.  That is much more activity that we saw in the previous 12 month period.  We believe low interest rates are really fuelling this activity, as in many areas it’s become cheaper to buy than rent.  

A trend we are starting to see is tenants moving out of our properties, some even breaking their lease early, to buy a house because they can actually save money.  The payments on a $1M house, based on a 4.2% mortgage, are only $807 per week whereas that same property would probably rent for $1,000 per week.  We are also experiencing strong activity below $1M.  We recently sold a 3 bedroom house with no off street parking at all for $750,000 after the first open home with multiple offers.  A week later, one of the buyers that missed out saw me standing outside another house in the area, speaking to the owner of that property about selling, and he simply pulled up out the front and said “I’ll take it”, as he was worried he’d miss out again if we put that property on the market.

The interesting thing will be to see what happens when interest rates start to climb again, as for some of these new buyers, they may no longer be able to afford the mortgage once rates go back to a normal level.