The Australian property market decade in review

author-avatar By on May 18, 2020
The Australian property market decade in review

Photo by Jamie Davies on Unsplash

A new report has lifted the lid on the decade that was for the Australian property market.

Buyer's agency Propertyology's 'Decade in Review (2010-2019) Report' analysed the period which commenced in the shadow of the Global Financial crisis (GFC) and ended in the ashes of the summer of bushfires and the dawn of COVID-19. 

With a GFC hangover, Australian property markets were largely unspectacular in the first half of the 2010s, outside of Sydney. 

Initially driven by a big influx in international investors followed by a lift in service sector jobs, Sydney's 46% median house price increase was the best of the capital cities over the five years ending 2014. 

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 16, 2021. View disclaimer.

A 35% increase in the median house price in Goulburn, Newcastle, Bendigo and Wingecarribee was more than double the rate of growth in six out of eight capitals.

Wollongong, Kiama, Geelong, Lake Macquarie, Bathurst, Dubbo, Baw Baw and Shellharbour also outperformed seven of the eight capitals over the five-years ending 2014.

Propertyology Head of Research Simon Pressley said the second half of the decade exposed flaws in some states' property markets, while others thrived. 

"The second half of the decade exposed Perth and Darwin’s unhealthy reliance on mining, leading to a very weak property market," Mr Pressley said.

"Hobart was the clear capital city standout with a 51% increase in median house price along with a 39% increase in rents."

propdec1

Shifted dwelling supply demand

According to Propertyology and CoreLogic data, the volume of residential dwellings in Australia increased from 8.8 million to 10.4 million over the decade. 

Mr Pressley said one of several big shifts in Australian real estate over the decade was increased dwelling density. 

"43.7% of all residential dwellings approved in Australia over the 10-years ending 2019 were attached dwellings (apartments and townhouses), which was a significant increase on the 31% in the previous decade," he said. 

"Five out of eight capital cities had more apartments than houses approved during the decade - Canberra (70.9%), Sydney (65.9%, Melbourne (52%), Darwin (51%), and Brisbane (50%)."

propdec2

While there was no shortage of apartment buyers, a strong supply-side response, concerns with construction integrity and same-same Lego building design resulted in vastly inferior financial performance of apartments compared to houses.

“Australia changed during the second half of the twenty-tens," Mr Pressley said.

"While housing affordability constraints and over-supply were creating challenges for big city property markets, there was a growing appetite for less stressful lifestyles and detached houses that people could still afford to buy.”

Accordingly, Australia’s best performed property markets over the five-years ending December 2019 included Victoria’s Macedon Ranges, Mitchell, and Bass Coast, Noosa in Queensland, New South Wales’ Snowy Monaro, Shoalhaven, Orange, Bega Valley and Nambucca, while the property market in Launceston was also strong.

Housing finance strangled 

Despite an almost 4 million person growth in population, record low interest rates and millions of extra dwellings, Propertyology found total transaction volumes were lower than the previous decade. 

“The 113,126 quarterly average volume of transactions in Australian real estate during the twenty-tens was notably lower than the 125,342 during the previous decade," Mr Pressley said.

"One would ordinarily expect to see a quarterly average in excess of 140,000 transactions, however a sledgehammer attitude from the banking regulator (APRA) intervened.”

Mr Pressley said the second half of the decade was marred by tight credit supply which slowed the entire economy. 

“It had an adverse impact on home ownership, on the bulging $50 billion spent on aged pensions each year, the lost stamp duty revenue diminishing state government infrastructure funding capacity and was a general dampener on the broader economy.”

propdec3

While the volume of transactions was lower than the previous decade, Mr Pressley said the 2010s saw an increase in professionals assisting and completing these transactions. 

“In the real estate sector, this meant that approximately 60% of property transactions were financed via a mortgage broker and there was greater appreciation for engaging a skilled buyer’s agent,” he said.

Higher engagement in financial wellbeing 

Mr Pressley said the 2010s would be remembered for the emergence of the rentvestor, with Australians reflecting on financial decisions made by their predecessors and understanding a change in thinking was required. 

“The strategy of renting a dwelling that satisfies one’s lifestyle while owning an investment property (or a portfolio of properties) in completely different locations became increasingly common during the decade. We’ll see more of it.” Mr Pressley said. 

Another example of Australians becoming more engaged in their future financial wellbeing was evident in the form of enormous growth in self-managed superannuation funds (SMSFs).

The estimated 1.2 million Australians with an SMSF come the end of 2019 was a significant representation from a nation that had a workforce of 13 million people by the end of the decade.


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.

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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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