Australian property prices grow in value for the first time since the pandemic

Australian property prices grow in value for the first time since the pandemic

Houses and units both went up in value over the last quarter, according to a new report, posting gains for the first time since the pandemic put prices in freefall.

The value of units in some capital cities still fell, but the drops weren’t enough to offset the national average, defying a trend that’s taken place for five consecutive months.

A change in momentum

Across the country, property prices lifted on average over the September quarter, according to Domain’s House Price Report.

Houses gained 0.9 per cent in value for the quarter for median prices of $776,144, pushing the annual lift to 4.6 per cent. Meanwhile, units posted gains of 0.1 per cent to push quarterly prices to $549,253, bucking a five month trend of shedding value, and lifting annual gains to 2.2 per cent.

"Nationally, house prices recovered half of the value lost over the previous quarter, although values are below that seen pre-pandemic,” Dr Nicola Powell said, senior research analyst at Domain.

“Buyers have been lured back into the market by low interest rates, government tax cuts and other incentives and the easing of coronavirus restrictions, as well as a change in housing preferences post-lockdown."

But the picture was much more chequered than the bottom line of the national average. Whereas house prices continued to go up in value in every capital city, unit prices shed value in four capital cities.

For the quarter, Sydney units dropped in value by 0.2 per cent and Melbourne by 0.1 per cent. Drops in Tasmania and Canberra units were more substantial for the quarter, shedding 9.1 per cent and 2.1 per cent respectively.

Median House Prices, as per Domain

CAPITAL CITY Sep-20 Jun-20 Sep-19 QOQ YOY
Sydney $1,154,406 $1,141,097 $1,080,996 1.20% 6.80%
Melbourne $875,980 $876,097 $862,063 0.00% 1.60%
Brisbane $596,316 $594,173 $574,838 0.40% 3.70%
Adelaide $564,927 $549,574 $529,164 2.80% 6.80%
Perth $534,336 $531,557 $521,911 0.50% 2.40%
Hobart $555,754 $519,705 $480,429 6.90% 15.70%
Canberra $817,810 $789,905 $745,004 3.50% 9.80%
Darwin $539,463 $505,896 $503,214 6.60% 7.20%
Combined Capitals $811,966 $804,545 $776,144 0.90% 4.60%

Median unit prices, as per Domain

CAPITAL CITY Sep-20 Jun-20 Sep-19 QOQ YOY
Sydney $732,423 $733,753 $702,237 -0.20% 4.30%
Melbourne $536,659 $537,404 $522,123 -0.10% 2.80%
Brisbane $383,585 $377,297 $408,417 1.70% -6.10%
Adelaide $331,553 $317,593 $316,460 4.40% 4.80%
Perth $335,869 $333,599 $351,810 0.70% -4.50%
Hobart $384,672 $423,310 $390,461 -9.10% -1.50%
Canberra $447,143 $456,656 $458,996 -2.10% -2.60%
Darwin $326,268 $312,319 $302,679 4.50% 7.80%
Combined Capitals $561,518 $561,038 $549,253 0.10% 2.20%

Properties have lost thousands, but some have already recovered

The Australian Bureau of Statistics (ABS) estimates the average home lost about $12,500 in value in the nine months since the beginning of the year.

The value was shed in five consecutive months following the COVID-19 lockdowns introduced in March, a time when the pandemic roiled uncertainty across industries, businesses and the routines of daily life.

Analysts, economists and banks expressed concern that the property market was on its way to losing as much as 15 per cent in value, according to some estimates. (These estimates have since been reigned in.)

But the most recent quarterly results offer some optimism that the worst of the property fall has passed. Melbourne’s exit from one of the world’s longest lockdowns -- after taming a second wave of the COVID-19 pandemic -- has only contributed to the sentiment.

Westpac, which revised its forecast of a 10 per cent property fall to 5 per cent, has said people have the confidence to spend their money buying houses again. The bank’s most recent consumer confidence index found people’s enthusiasm to buy a house had reached levels not seen since 2019.

“Confidence in the housing market has boomed,” Bill Evans said, chief economist at Westpac. “Of all the results in this … survey, this one is the most surprising and reassuring.”

Backing the growing sentiment is a solid increase in the value of owner occupier loans being issued. The ABS revealed $16.3 billion in loans for 12,302 properties were approved in August, a rise of 13.6 per cent -- the largest increase since records were established 18 years ago.

Housing affordability hits a decade high

People are spending a smaller portion of their income on mortgage repayments, according to analysts, causing housing to reach affordability levels not seen in ten years.

Two income households were spending 23 per cent of their monthly earnings on mortgage repayments in September, Moody’s Investor Service said, a drop from the ten year average of 26 per cent.

“The affordability of apartments and houses improved in all capital cities over the year to September,” the analysts said.

Several reasons contributed to the drop in mortgage spending on housing.

The cost of servicing a mortgage has dropped to record lows not seen in three decades, fuelling a refinancing boom as people take the opportunity to seize on lower repayments.

Then there’s the falling price of property, which has led to new buyers having to spend less on a piece of land they can call their own.

Did you find this helpful? Why not share this news?



Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By submitting this form, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.

Based on your details, you can compare the following Home Loans


Learn more about home loans

How do you qualify for a CBA home loan with casual employment?

Qualifying for a home loan without a full-time job may be challenging, but it can be done. The first step is to understand how a CBA home loan is assessed when you have casual employment.

Most lenders will assess your expenses and savings while checking your loan eligibility, checking on factors crucial to home loan approval, such as if your bills are paid on time and what your credit score presently looks like. 

Your income can be one of the most critical factors to determine your final approved home loan amount. As such, you’ll need to provide payslip copies to lenders to assist them in assessing your income during the loan tenure, regardless of your employment status, full-time, part-time, or otherwise.

Casual employees will want to be casually employed for at least 12 months to be eligible for a home loan. Alternatively, you want to have worked as a permanent casual worker (working for a fixed number of hours per week) for at least one month, or you should have been in your current job for a minimum of three months (if the hours are irregular) to be eligible for the loan.

Where can I get all the information about an ANZ first home buyer’s loan?

As a first home buyer, you may require help and hand-holding, and as such ANZ has the buying your first home section on its website full of important information. ANZ also has a form in this section you can fill out to get a free consultation from an ANZ First Home Coach and create your own plan for buying your first home. This coach will help you understand where your current income is being spent and plan for your home loan repayments. You’ll get a clear picture of the costs involved in purchasing a property and how to budget or save for these costs. The coach will help you understand different deposit options and manage your accounts to enhance your savings.

There are three types of ANZ first home loans - Standard Variable, Fixed, and Equity Manager. The features, interest rates, and terms for each are different, and you can compare them here.

When they apply for an ANZ home loan, first home buyers can also get guidance on applying for the First Home Owner Grant (FHOG). This is a one-off government grant that may be available to you when you’re buying your first home. The eligibility criteria for FHOG differs between the different states and territories, which is why it’s helpful to have expert advice when applying.

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

Can I get a NAB home loan on casual employment?

While many lenders consider casual employees as high-risk borrowers because of their fluctuating incomes, there are a few specialist lenders, such as NAB, which may provide home loans to individuals employed on a casual basis. A NAB home loan for casual employment is essentially a low doc home loan specifically designed to help casually employed individuals who may be unable to provide standard financial documents. However, since such loans are deemed high risk compared to regular home loans, you could be charged higher rates and receive lower maximum LVRs (Loan to Value Ratio, which is the loan amount you can borrow against the value of the property).

While applying for a home loan as a casual employee, you will likely be asked to demonstrate that you've been working steadily and might need to provide group certificates for the last two years. It is at the lender’s discretion to pick either of the two group certificates and consider that to be your income. If you’ve not had the same job for several years, providing proof of income could be a bit of a challenge for you. In this scenario, some lenders may rely on your year to date (YTD) income, and instead calculate your yearly income from that.

Can I get a NAB first home loan?

The First Home Loan Deposit Scheme of NAB helps first home buyers purchase a property sooner by reducing the upfront costs required. This scheme is offered based on a Government-backed initiative, with10,000 available places announced in October 2020.

Suppose your application for the NAB first home buyer loan is successful. In that case, you’ll only need to pay a low deposit, between 5 and 20 per cent of the property value and won’t be asked to pay lender's mortgage insurance (LMI). You’ll also receive a limited guarantee from the Australian government to purchase the property.

If you’re applying for the NAB first home buyer home loan as an individual, you need to have earned less than $125,000 in the last financial year. Couples applying for the NAB first home loan need to have earned less than $200,000 to be eligible. To be considered a couple, you need to be married or in a de facto relationship. A parent and child, siblings or friends are not considered a couple when applying for a NAB first home loan.

The NAB First Home Loan Deposit Scheme is currently offered only to purchase a brand new property, rather than an established property.

How long does Bankwest take to approve home loans?

Full approval for a home loan usually involves a property valuation, which, Bankwest suggests, can take “a week or two”. As a result, getting your home loan approved may take longer. However, you may get full approval within this time if you applied for and received conditional approval, sometimes called a pre-approval, from Bankwest before finalising the home you want to buy.  

Another way of speeding up approvals can be by completing, signing, and submitting your home loan application digitally. Essentially, you give the bank or your mortgage broker a copy of your home’s sale contract and then complete the rest of the steps online. Bankwest has claimed this cuts the approval time to less than four days, although this may only happen if your income and credit history can be verified easily, or if your home’s valuation doesn’t take time.

How can I apply for a first home buyers loan with Commonwealth Bank?

Getting a home loan requires planning and research. If you are considering a home loan with the Commonwealth Bank, you can find the information you need in the buying your first home section of the bank’s website.

You can see the steps you should take before applying for the loan and use the calculators to work out how much you can borrow, what your monthly repayments would be and the upfront costs you’d likely pay.

You can also book a time with a Commonwealth first home loan specialist by calling 13 2221.

CommBank publishes a property report that may help you understand the real estate market. The bank has also created a CommBank Property App that you can use to search for property.  The link to download this app is available on the same webpage.

If you are eligible for the First Home Loan Deposit Scheme, CommBank will help you process your application. The scheme helps first home buyers to purchase a home with a low deposit. You can read details about this scheme here and speak with a CommBank home lending specialist to understand your options.

How do I get a Suncorp home loan pre-approval?

Getting home loan pre-approval helps you work out a budget to help you search for a suitable property and make an offer with confidence. Once you put in an application, you should get your pre-approval outcome within two business days. To help get a fast turnaround time of your pre-approval application, ensure all the information and documentation that Suncorp requires. This includes proof of identification, recent payslips, bank account and credit card statements.

You can submit the home loan pre-approval application online. You’ll be asked for information about your income, expenses, assets, and debts. It should take you about 10 minutes to fill out the application, and you can do it free of charge. A Suncorp lending specialist will review your application and contact you within 24 hours or the next working day. Suncorp will not run a credit check until you have heard from this lending specialist.

Once you get Suncorp home loan pre-approval, it’s valid for 90 days. If you don’t find a property you wish to buy in this time you may be able to apply for an extension, speak to your Suncorp lending specialist about this.

Can I apply for an ANZ non-resident home loan? 

You may be eligible to apply for an ANZ non-resident home loan only if you meet the following two conditions:

  1. You hold a Temporary Skill Shortage (TSS) visa or its predecessor, the Temporary Skilled Work (subclass 457) visa.
  2. Your job is included in the Australian government’s Medium and Long Term Strategic Skills List. 

However, non-resident home loan applications may need Foreign Investment Review Board (FIRB) approval in addition to meeting ANZ’s Mortgage Credit Requirements. Also, they may not be eligible for loans that require paying for Lender’s Mortgage Insurance (LMI). As a result, you may not be able to borrow more than 80 per cent of your home’s value. However, you can apply as a co-borrower with your spouse if they are a citizen of either Australia or New Zealand, or are a permanent resident.

Does Westpac offer loan maternity leave options?

Having a baby or planning for one can bring about a lot of changes in your life, including to the hip pocket. You may need to re-do the budget to make sure you can afford the upcoming expenses, especially if one partner is taking parental leave to look after the little one. 

Some families find it difficult to meet their home loan repayment obligations during this period. Flexible options, such as the Westpac home loan maternity leave offerings, have been put together to help reduce the pressure of repayments during parental leave.

Westpac offers a couple of choices, depending on your circumstances:

  • Parental Leave Mortgage Repayment Reduction: You could get your home loan repayments reduced for up to 12 months for home loans with a term longer than a year. 
  • Mortgage Repayment Pause: You can pause repayments while on maternity leave, provided you’ve made additional repayments earlier.

When applying for a home loan while pregnant, Westpac has said it will recognise paid maternity leave and back-to-work salaries. All you need is a letter from your employer verifying your return-to-work date and the nature of your employment. Your partner’s income, government entitlements, savings and investments will may help your application.

How can I get ANZ home loan pre-approval?

Shopping for a new home is an exciting experience and getting a pre-approval on the loan may give you the peace of mind that you are looking at properties within your budget. 

At the time of applying for the ANZ Bank home loan pre-approval, you will be required to provide proof of employment and income, along with records of your savings and debts.

An ANZ home loan pre-approval time frame is usually up to three months. However, being pre-approved doesn’t necessarily mean you will get your home loan. Other factors could lead to your home loan application being rejected, even with a prior pre-approval. Some factors include the property evaluation not meeting the bank’s criteria or a change in your financial circumstances.

You can make an application for ANZ home loan pre-approval online or call on 1800100641 Mon-Fri 8.00 am to 8.00 pm (AEST).

How do I get a pre-approved home loan with Aussie?

Getting Aussie home loan pre-approval means receiving conditional support from Aussie Home Loans to borrow the money you need to buy a home. 

It’s an indication of the approximate amount Aussie may offer you, subject to some terms and conditions. Keep in mind, having a pre-approved home loan does not guarantee an actual approval of your loan when it comes time to buy.

Aussie home loan pre-approval often involves speaking to one of the lender’s brokers. You can make an appointment online. You’ll often have to submit your personal details and other information about your assets, income, liabilities and expenses.  It’s worth remembering that a pre-approved loan is usually valid for a few months.

Does UBank offer home loan pre-approvals?

If you’re applying for a home loan with UBank, you can first get an approval in principle. You’ll need to provide information about your job and earnings, your household expenses, the assets you own and the debts you owe. 

UBank will assign a home loan specialist to discuss these details over a phone call, which can take about 30 minutes. 

The bank will then confirm if you’ve received in-principle approval for your home loan. Depending on how you submit your documents, this could take a few days or a few weeks. If successful, the approval will be valid for 60 days. 

What are the NAB term deposit interest rates for businesses?

If you’re looking to lock in a return on your business savings, one option is a business term deposit with NAB. The big four bank provides competitive interest rates while giving you the flexibility to choose the term. NAB offers business term deposit interest rates for investments of between $5,000 to $499,999.

NAB doesn’t charge any monthly account or application fees. The interest is calculated daily and for the 90-day term and six months term, you will get paid when the deposit matures. For the 12 months term, you can either choose to get paid monthly, quarterly, half-yearly or annually. 

If you wish to withdraw your funds before the deposit matures, you need to give NAB 31 days notice. However, they do make exceptions if you’re experiencing hardship and need the funds immediately. Either way, you may have to bear the prepayment cost, which you can learn more about in the Terms and Conditions.