Strap in, because house prices are at a 'record high'

author-avatar By on January 28, 2021
Strap in, because house prices are at a 'record high'

The latest Domain house prices report shows house prices hit a record high at the end of 2020 in all but two Australian capital cities.

According to Domain, the median house price across all capital cities in the three months to 31 December 2020 was $852,940: a 5.8% increase on a year ago. 

This report comes after some economists predicted up to 30% price falls throughout 2020.

All but two capital cities - Darwin, and Perth - are at record high prices for houses.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable 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 26, 2021. View disclaimer.

The results were more of a mixed bag for units, with Sydney's down 0.3% on the year, Brisbane's down 3.0%, and Canberra's units down 1.3%.

Adelaide and Darwin had the strongest gains, up 13.5% and 7.5% respectively, while Melbourne's gain of 4.4% over the quarter means unit prices in the cultural capital are now at a record high. 

Gap between unit and house prices widening 

The national 4.1% price gain over the December quarter for houses represents the steepest quarterly jump in four years, according to Domain's senior research analyst Dr Nicola Powell.

"The price gap between houses and units in Sydney is continuing to widen. Over the past three decades it is rare that house and unit prices move in opposite directions annually," she said.

"Weaker investor activity has disproportionately impacted unit prices because they tend to be the preferred property type. There are also particular locations with increased supply as a result of heightened development in recent years.

"Changed lifestyle preferences post-lockdown and the option of remote working has driven demand to outer suburban and regional locations as buyers seek affordability, liveability, space and greater value for money."

The report comes after the Australian Bureau of Statistics found various government initiatives to stimulate housing stemmed the new house cost rise, affecting the consumer price inflation index.

Dr Powell said Australia's handling of the pandemic and the associated economic fallout placed confidence in home buyers.

"Government support measures, a remarkable recovery in consumer confidence, successful containment of COVID-19 outbreaks and the pessimistic outlook for property prices failing to materialise have played a role in supporting market activity and prices," she said.

"Record low interest rates have spurred buyer activity with cheaper credit easing the affordability of mortgage repayments.

"This has ultimately created competition between buyers, driving house prices higher."

Earlier in the month, Domain found rents are at a seven-year low in the capital cities despite the price gains, with the median unit in Brisbane now more expensive to rent than the median in Melbourne.

Capital City Home Prices, December Quarter 2020

Capital City House Price Unit Price Year-On-Year Gain (House/Unit)
Sydney $1,211,488 $729,840 +6.7% / -0.3%
Melbourne $936,073 $569,677 +3.9% / +2.5%
Brisbane $616,387 $395,677 +5.6% / -3.0%
Adelaide $574,264 $350,122 +6.1% / +13.5%
Canberra $855,530 $485,410 +9.1% / -1.3%
Perth $563,214 $347,585 +6.3% / +4.4%
Hobart  $564,091 $432,552 +12.4% / +2.5%
Darwin $533,845 $285,539 +3.6% / +7.5%
National $852,940 $574,245 +5.8% / +0.9%

Source: Domain


Photo by Marc Sendra Martorell 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.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

Latest Articles

author-avatar
Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree to the Savings Privacy Policy