Hobart houses grow 17.3% as Darwin units slump 14.0%

Hobart houses grow 17.3% as Darwin units slump 14.0%

Australia’s eight capital cities have wildly different house and unit markets, according to new quarterly price stats from Domain.

The new report, which covers the December quarter, shows that Australia’s median price has now climbed to $813,024 for houses and $557,794 for units.

Other key facts include:

  • Sydney has the most expensive house and unit prices
  • Hobart has the cheapest house prices
  • Adelaide has the cheapest unit prices
  • Hobart has the best quarterly house price growth, best annual house price growth and best annual unit price growth
  • Darwin has the worst quarterly house price growth, worst annual house price growth and worst annual unit price growth – but the best quarterly unit price growth
  • Brisbane has the worst unit price growth over the quarter

Here is a city-by-city breakdown of the house and unit markets:

Sydney

Median house price = $1,179,519

  • Quarterly change = +0.5%
  • Annual change = +4.0%

Median unit price = $736,879

  • Quarterly change = +0.4%
  • Annual change = +1.7%

Key stat

  • Sydney’s median house price is lower than six months ago

Domain commentary

“Sydney’s double-digit growth phase appears to be in the rear-view mirror, and with no further rate cuts in sight, the market may continue to moderate in 2018. Demand is likely to weaken, as the heightened investor activity that Sydney has experienced is unlikely to be significantly offset by the rising number of first home buyers.”

Melbourne

Median house price = $903,859

  • Quarterly change = +3.2%
  • Annual change = +11.3%

Median unit price = $506,079

  • Quarterly change = +2.8%
  • Annual change = +8.0%

Key stat

  • Melbourne units recorded their strongest annual price growth in seven years

Domain commentary

“Similar to Sydney, first home buyer numbers in Melbourne have risen, recording its highest level of activity since 2009. This can be attributed largely to the Victorian government’s entry-level buyer incentives. In the coming months we are likely to continue to see a higher demand for entry-level homes, helping to drive price growth at the lower end of the market, as well as support regional price movements throughout the state.”

Brisbane

Median house price = $903,859

  • Quarterly change = +3.2%
  • Annual change = +11.3%

Median unit price = $506,079

  • Quarterly change = +2.8%
  • Annual change = +8.0%

Key stat

  • Brisbane unit prices are at a four-year low

Domain commentary

“The surge of new apartments in Brisbane remains ahead of the demand, and although this continues to impact unit prices, population increases and a slowdown in new development starts and completions may work together to help balance the market.”

Perth

Median house price = $557,567

  • Quarterly change = +0.5%
  • Annual change = -2.5%

Median unit price = $369,402

  • Quarterly change = +1.0%
  • Annual change = -1.7%

Key stat

  • Negative price growth for Perth units has improved to its lowest level in almost three years

Domain commentary

“Perth’s housing market outlook for 2018 depends largely on whether the city’s economy and population track upwards throughout the year.”

Adelaide

Median house price = $522,815

  • Quarterly change = +0.9%
  • Annual change = +3.5%

Median unit price = $315,794

  • Quarterly change = -1.6%
  • Annual change = +2.0%

Key stat

  • Adelaide has the lowest median unit price of all the capitals

Domain commentary

“Adelaide has avoided the extreme price surges impacting Australia’s east coast markets. Its steady pace of growth and diverse coastal lifestyle makes it a reliable location for buyers heading into 2018.”

Hobart

Median house price = $443,521

  • Quarterly change = +10.0%
  • Annual change = +17.3%

Median unit price = $318,467

  • Quarterly change = -0.8%
  • Annual change = +14.2%

Key stat

  • Hobart house prices are at record levels

Domain commentary

“It has been over a decade since Hobart experienced such a surge in house prices over a quarter, and the capital city’s results over the December quarter highlight the growing demand for homes in the Tasmanian capital.”

Canberra

Median house price = $753,516

  • Quarterly change = +5.0%
  • Annual change = +8.4%

Median unit price = $426,124

  • Quarterly change = +0.1%
  • Annual change = +0.4%

Key stat

  • Canberra house prices have reached record highs

Domain commentary

“Canberra house prices have been tracking upward for 15 consecutive months, delivering the second-best performance this quarter after Hobart. Renewed buyer and seller confidence has provided the nation’s capital with a substantial price boost that will likely continue throughout 2018.”

Darwin

Median house price = $565,696

  • Quarterly change = -2.6%
  • Annual change = -7.4%

Median unit price = $395,279

  • Quarterly change = +9.3%
  • Annual change = -14.0%

Key stat

  • Darwin house prices are at an eight-year low

Domain commentary

“Darwin was the only capital city to record a median house price decline over the quarter and over the year, and a strengthening in the local market depends primarily on the state of the economy as we head into 2018.”

Australia

Median house price = $813,024

  • Quarterly change = +1.4%
  • Annual change = +5.0%

Median unit price = $557,794

  • Quarterly change = +0.3%
  • Annual change = +2.3%

Key stat

  • National annual house price growth is at 15-month lows

Domain commentary

“A varied level of price growth across all capital cities was reflected in both the national median house and unit prices this quarter. Overall, prices rose marginally in the three months to December but the slower pace has weighed down the annual growth to its lowest rate since September 2016.”

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

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Learn more about home loans

Cash or mortgage – which is more suitable to buy an investment property?

Deciding whether to buy an investment property with cash or a mortgage is a matter or personal choice and will often depend on your financial situation. Using cash may seem logical if you have the money in reserve and it can allow you to later use the equity in your home. However, there may be other factors to think about, such as whether there are other debts to pay down and whether it will tie up all of your spare cash. Again, it’s a personal choice and may be worth seeking personal advice.

A mortgage is a popular option for people who don’t have enough cash in the bank to pay for an investment property. Sometimes when you take out a mortgage you can offset your loan interest against the rental income you may earn. The rental income can also help to pay down the loan.

When do mortgage payments start after settlement?

Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.

Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.

Once the settlement process is complete, the lender allows you to draw down the loan. The loan amount is debited from your loan account. As soon as the settlement paperwork is sorted, you can collect the keys to your new home and work your way through the moving-in checklist.

Why does Westpac charge an early termination fee for home loans?

The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee. 

The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.

Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

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The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

What is a low-deposit home loan?

A low-deposit home loan is a mortgage where you need to borrow more than 80 per cent of the purchase price – in other words, your deposit is less than 20 per cent of the purchase price.

For example, if you want to buy a $500,000 property, you’ll need a low-deposit home loan if your deposit is less than $100,000 and therefore you need to borrow more than $400,000.

As a general rule, you’ll need to pay LMI (lender’s mortgage insurance) if you take out a low-deposit home loan. You can use this LMI calculator to estimate your LMI payment.

Does each product always have the same rating?

No, the rating you see depends on a number of factors and can change as you tell us more about your loan profile and preferences. The reasons you may see a different rating:

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Why do I need to enter my current mortgage information?

We use your current mortgage details to calculate the potential savings if you were to change lenders, and also to help us point you to loans that may meet your needs.

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What is the average annual percentage rate?

Also known as the comparison rate, or sometimes the ‘true rate’ of a loan, the average annual percentage rate (AAPR) is used to indicate the overall cost of a loan after considering all the fees, charges and other factors, such as introductory offers and honeymoon rates.

The AAPR is calculated based on a standardised loan amount and loan term, and doesn’t include any extra non-standard charges.

What is stamp duty?

Stamp duty is the tax that must be paid when purchasing a property in Australia.

It is calculated by the state government based on the selling price of the property. These charges may differ for first homebuyers. You can calculate the stamp duty for your property using our stamp duty calculator.

What is a variable home loan?

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

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

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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.

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What is the Home Loan Rate Promise?

The Home Loan Rate Promise is RateCity putting its money where its mouth is. We believe that too many Australians are paying too much for their home loans. We’re so confident we can help Aussies save money, if we can’t beat your current rate, we’ll give you a $100 gift card.*

There are two reasons it pays to check your rate with the Home Loan Rate Promise:

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We are giving away, for one lucky entrant, the chance to win $1 million. Here’s how it will work:

On 21 May 2020, one winner will be drawn from all the entries. This winner will then get a one in 200 shot at winning one million dollars. Even if they’re unlucky and don’t win the one million, they’ll still leave $5000 richer.