COVID who? Australian property prices rose 3.6% in 2020

author-avatar By on March 16, 2021
COVID who? Australian property prices rose 3.6% in 2020

Australian property prices rose 3.0% in the December quarter, the strongest quarterly growth since the previous year.

The data from Australian Bureau of Statistics (ABS) revealed housing prices were up 3.6% annually, with every capital city recording an increase for the first time since December 2014. 

All capital cities recorded an increase in property prices in the December quarter, led by Melbourne and Canberra, both up 3.4%, and Sydney, up 3%. 


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 16, 2021. View disclaimer.

Showcasing the divergence between house and unit performance, house prices rose 3.9% in Sydney and 3.7% in Melbourne, while attached dwelling prices rose 1.4% and 2.5% respectively. 

ABS Head of Prices Statistics Michelle Marquardt said a number of key measures of the property market saw positive growth over the quarter. 

"The rise in property prices is consistent with a range of housing market indicators. New lending commitments to households, auction clearance rates and days on market all improved during the December quarter," Ms Marquardt said. 

"Annually, residential property prices rose 3.6%. This is the first time that all capital cities have seen an annual rise since the December quarter 2014.

"The largest rise in property prices was in Hobart (6.4%), followed by Canberra (5.2% and Perth (4.2%)."

abshpdec01

Source: ABS

The ABS found the average price of residential dwellings in Australia was now $728,500, after rising $21,300 over the quarter.

The total value of Australia’s 10.6 million residential dwellings rose by $257.9 billion to $7.72 trillion, the strongest quarterly rise since December 2016. 

"The numbers of residential property sales increased in all capital cities apart from Melbourne and Hobart during 2020. The strongest increases were observed in Perth, Canberra, Sydney and Brisbane," Ms Marquardt said.

According to CoreLogic, home values spiked 2.1% in February alone, the largest month-on-month change in 17 years. 

New owner-occupier loans and interest-only loans spike

According to the Australian Prudential Regulation Authority (APRA), new owner-occupier loans were up 23.6% between December 2019 and December 2020, from $71.9 billion to $88.9 billion. 

Interest-only loans spiked even further over the same period, up 31.2% from $18.7 billion to $24.6 billion. 

Loans with a Loan to Value Ratio (LVR) greater than 95% increased by 27.4%, albeit from a low base of $1.6 billion to $2.1 billion. 

APRA said these increases helped to support steady growth, and was unsure of how lending would unfold as schemes like JobKeeper and HomeBuilder came to an end. 

"Overall growth in loans and advances was slow, although housing lending grew moderately, supported by lending to owner-occupiers," they said.

"Despite moderately increased new lending at higher loan-to-valuation ratios and debt-to-income ratios, available indicators do not suggest any material relaxation in housing lending standards, with these metrics remaining broadly in line with historical averages.

"Key measures of asset quality were stable thanks to a range of measures providing support to borrowers, but the outlook is uncertain as support measures change over coming quarters."

According to the ABS, owner-occupier numbers in January were up over 70% more than what was seen at the same time last year, with first-home buyers accounting for 36.5% of all owner-occupier loans written in the month. 


Photo by Ayush Jain on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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