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Aussie capitals experience highest property price growth on record

Aussie capitals experience highest property price growth on record

Residential property prices in Australia’s eight capital cities experienced some of their strongest ever growth over the past year. So, how much would a mortgage on an average property cost now?  

According to the latest figures from the Australian Bureau of Statistics (ABS), residential property prices rose 23.7 per cent through the year to December quarter 2021; the strongest annual growth since the Residential Property Price Index series began in the September quarter 2003.

During 2021, five of Australia’s capitals experienced their largest annual rise in residential property prices on record: Hobart (+29.8 per cent), Canberra (+28.8 per cent), Brisbane (+27.8 per cent), Sydney (+26.7 per cent), and Adelaide (+23.9 per cent).

Looking just at the December 2021 quarter, residential property prices rose 4.7 per cent across the eight capitals. The strongest quarterly price growth was recorded in Brisbane (+9.6 per cent), followed by Adelaide (+6.8 per cent), Hobart (+6.5 per cent), and Canberra (+6.4 per cent).

In dollar values, the total value of Australia’s 10.8 million residential dwellings rose by $512.6 billion to $9,901.6 billion in the December quarter 2021, resulting in a mean residential dwelling price of $920,100; up from $876,100 in the September quarter 2021.

So based on these figures, how much could a home owner expect to pay for a mortgage on a property in one of Australia’s eight capital cities?

To buy a $920,100 property, a borrower would need to have first saved up a 20 per cent deposit of $184,020 and borrow the remaining $736,080. It would also be possible to apply for a mortgage with a deposit of 10 per cent ($92,010) or even five per cent ($46,005) of the property value, but that would require also adding Lender’s Mortgage Insurance (LMI) to the upfront costs, or getting support from a guarantor or a government support program.

Assuming an owner occupier was making monthly principal and interest repayments at a variable rate of 2.52 per cent (the average rate for new loans in January 2022 according to the RBA) over a 30 year term, the loan costs may break down as follows:

 Deposit

Loan amount 

Monthly repayment 

Total interest 

Total loan cost 

Total amount paid (including deposit) 

$184,020 (20%)$736,080 $2916 $313,704 $1,049,784$1,233,804
$92,010 (10%) $828,090 $3281 $352,917 $1,181,007 $1,273,017 
$46,005 (5%) $874,095 $3463 $372,523 $1,246,618 $1,292,623

Source: Moneysmart. Does not include fees or other charges (including LMI charges), and assumes that the interest rate will stay the same over the full loan term. This example is for illustrative purposes only. 

Company
Product

Budget Home Loan

Real Time Rating™

3.59

/ 5
Interest Rate

2.84

% p.a

Variable

Comparison Rate*

2.85

% p.a

Repayment

$1,398

monthly

Real Time Rating™

3.59

/ 5
Go to site
Company
Product

Fixed Rate Home Loan (with Advantage Package)

Real Time Rating™

1.86

/ 5
Interest Rate

5.24

% p.a

Fixed - 2 years

Comparison Rate*

5.22

% p.a

Repayment

$1,310

monthly

Real Time Rating™

1.86

/ 5
Go to site

Cashback

Receive $4000 in cashback when you refinance
Company
Product

Base Variable Rate Home Loan

Real Time Rating™

2.02

/ 5
Interest Rate

3.74

% p.a

Variable

Comparison Rate*

3.78

% p.a

Repayment

$1,541

monthly

Real Time Rating™

2.02

/ 5
Go to site

Cashback

$2,000 cashback when you refinance a loan of $250,000 or more
Company
Product

Live-in Variable

Real Time Rating™

3.99

/ 5
Interest Rate

2.59

% p.a

Variable

Comparison Rate*

2.60

% p.a

Repayment

$1,359

monthly

Real Time Rating™

3.99

/ 5
Go to site

special

Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.

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This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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