Sydney housing prices hit new record high, Melbourne not far behind

author-avatar By on March 11, 2021
Sydney housing prices hit new record high, Melbourne not far behind

Sydney property prices have reached new dizzying heights, recovering to surpass their 2017 peak, according to CoreLogic.

The median Sydney dwelling price is now a record $895,933, the median housing price is a record $1,061,229, and the median unit price is $738,254. 

Tim Lawless, CoreLogic's executive research director, said he was unsurprised the growth seen nationwide in the housing market had led to another capital city reaching record-breaking numbers. 

“The recovery trend in Sydney following the -15.3% decline from July 2017 to May 2019 was interrupted by COVID-19, with housing values falling by -3.0% through the worst of the pandemic," Mr Lawless said.

“Since housing values found a floor in October last year, Sydney home values have risen 5.7% to reach a new record high today.

"The fresh record high is great news for Sydney home owners, but highlights the challenges for non-home owners looking to participate in the housing market as values rise faster than incomes.”

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 27, 2021. View disclaimer.

Sydney property prices crashed by 15.3% between July 2017 and May 2019, but only fell 3% throughout COVID. 

Since bottoming out in October, Sydney home values have risen by 5.7% to find a new high. 

Eliza Owen, CoreLogic head of research, said while the rate of growth may falter, values were likely to continue their upward trend this year. 

"The momentum seen so far this year in the Sydney housing market is extraordinary, and it seems unlikely that price increases could continue at this rate," Ms Owen told Savings.com.au.

"I imagine later this year, more listings and dwelling completions could ease growth rates, or affordability constraints could also ease the rate of growth.

"But despite the possibility of a lower growth rate, values are likely to continue rising for the rest of the year."

According to CoreLogic, Melbourne isn't lagging far behind Sydney's record-breaking growth, but Perth is some way away from reaching its former peak.

Melbourne dwelling values are just 1.3% below their pre-COVID high, while Perth values remain 16.9% lower than their 2014 high. 

sydrecord01

Source: CoreLogic 

Nationally, dwelling values increased 2.1% in February, the largest monthly change since August 2003, with Sydney and Melbourne the strongest markets, rising 2.5% and 2.1% respectively. 

Commenting on the February figures, Mr Lawless said buying property in the two capitals would be challenging for those on lower incomes. 

"With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge in these cities.”

Time for the RBA or APRA to step in? 

Reserve Bank (RBA) Governor Phillip Lowe noted for the first time yesterday, that the central bank had discussed the housing market boom, but had no plans to intervene. 

"I recognise that low interest rates are one of the factors contributing to higher housing prices and that high and rising housing prices raise concerns for many people," Dr Lowe said. 

"There are various tools, other than higher interest rates, to address these concerns, leaving monetary policy to maintain its strong focus on the recovery in the economy, jobs and wages."

Ms Owen agreed it was not the responsibility of the RBA to intervene, despite their policies influencing property prices. 

"To an extent, rising house prices are a way low interest rates work to stimulate the economy, because it creates a wealth effect among home owners," she told Savings.com.au.

"Institutions that would have the responsibility of monitoring market conditions would be the Australian Prudential Regulation Authority (APRA), who keep an eye on prudential standards in lending, and government, who would have an interest in addressing barriers to home ownership."


Photo by Adrian Rem 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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