Australian median house price surpasses $1 million

author-avatar By
on January 27, 2022 Fact Checked
Australian median house price surpasses $1 million

The combined median house price across Australia's capital cities is now a record-breaking high of $1,066,133 according to Domain's latest report.

Not only have house prices reached record highs across Australia, combined capital unit prices have also reached a new high of over $621,000.

Despite this, house prices have still risen three times faster than units over the past year according to Domain's December 2021 Quarterly House Price Report.

When compared to early 2021, growth in both house and unit prices has lost momentum, suggesting the peak pace of growth has passed.

Domain Chief of Research Nicola Powell said house and unit prices are continuing to beat price records due to lockdown activity rebounds, high household savings, and the ongoing demand to buy property.

"Demand continues to outstrip supply across a majority of the cities however rapid price growth and affordability issues are likely to shift demand in 2022," Dr Powell said.

"Price growth has slowed from earlier in 2021 but it is higher than last quarter."

Domain's Chief Revenue Officer John Foong said that there are changing market dynamics afoot.

"As consumers look to more affordable options, we’re seeing increases in keyword searches for 'duplex' 'dual' and 'unit' and believe that although Sydney, Melbourne, Brisbane and Adelaide set new record unit prices, house prices continue to gain the highest yields for investors," Mr Foong said.

Canberra second most expensive city to buy a house

Every capital city excluding Perth and Darwin hit new record highs for house prices in the December quarter.

Sydney remains Australia's most expensive city to buy a house or unit, with record median prices of $1.6 million and $800,000 consecutively.

House prices in Sydney have risen 33.1% from December 2020 to December 2021.

"House prices have grown four times faster than units over the past year, a divergence that has created a record price gap with houses now double the price of a unit," Dr Powell said.

"The rapid escalation in price is proving to be a significant financial barrier to entry for buyers and upgraders against a backdrop of low wage growth.

"Housing affordability will continue to weigh on demand throughout 2022."

Canberra has claimed the second most expensive spot to buy a house with a median house price of $1.178 million, with prices rising by 36.6% over the past year, as well as a near-record unit price of $555,644.

House prices in Canberra have risen 52% since the pandemic began, the biggest price jump recorded across the capital cities, which presents a financial barrier for buyers.

"The disparity between property performance and associated affordability constraints is expected to drive demand to units," Dr Powell said.

"While it is still a competitive market for home hunters, rising supply and easing demand trends should support more realistic seller prices and greater buyer choice."

Australia's third most expensive capital, Melbourne, hit new record-highs with a $1.1 million median house price and $593,387 median unit price.

"Sellers should move into 2022 with some confidence that the pace of price growth will ease, and they will need to have a more realistic view of pricing because buyers now have more choices," Dr Powell said.

Brisbane, Adelaide and Canberra house prices show no signs of slowing down

Brisbane's house prices have risen 10.7% over the last quarter and 25.7% annually - the steepest increase in roughly 18 years - with a median house price of $792,065.

The divergence between house and unit prices are also at an all-time high, with advertised homes for sale at a multi-year low.

"The rapid price escalation will prove to be a financial hurdle for entry buyers," Dr Powell said.

"It will also be challenging to upgrade from a unit to a house, particularly against a backdrop of low wages growth."

Buyers in Adelaide can now expect to pay over $731,000 for a house, as house prices increased at the steepest rate on record at 8.6% quarterly and 27.5% annually.

Unit prices also had the strongest annual gain since 2008, with the median price sitting at $380,349.

"Demand continues to outstrip supply with the overall supply of homes for sale dropping to a multi-year low and forcing house price growth," Dr Powell said.

"Current demographic trends will continue to support housing demand with more people arriving into Greater Adelaide than leaving."

Hobart's house prices have risen 44.9% since the start of the pandemic, the second highest growth rate in Australia, with the current median house price of $752,110. 

"With the lowest average wages of all the states we can expect that entry-level buyers who are on a local average wage will find it increasingly difficult to enter the housing market," Dr Powell said.

"Home hunters will find buying conditions to be fierce as the number of homes for sale is well below the five-year average, and while stock is starting to build, it remains tight."

Darwin's median house prices have risen 30.1% over the past 12 months, sitting at $645,487, while the median unit price is currently $326,159.

Perth's median house price is now sitting at $612,348, and its median unit price is $380,353.


Advertisement

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

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • 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%
UNLIMITED REDRAWSSPECIAL 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%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • 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
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *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. Rates correct as of May 26, 2022. View disclaimer.


Image by Johnny Bhalla 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. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

author-avatar
Rachel is a Finance Journalist, and joined Savings in 2021. Coming from a background in the FinTech space, her interests include the innovation of lending technology, property, investing, and more. With a passion for educating and informing people about their finances, she hopes to increase the financial literacy of everyday Australians.

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree
to the Savings Privacy Policy