Aussie property hits $10 trillion: What does this mean for homebuyers?

By Cameron Thomson · · 2 min read
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House prices rising in the market up to $10 Trillion

Despite dire predictions for the economy, Australia's housing market has rebounded to a staggering $10 trillion at the end of August, marking the first instance of hitting this double-digit value since June 2022, according to recent CoreLogic research.

This increase is credited to a combination of elevated home values and an increased stock of housing. At the end of August, the median home value in Australia reached $732,886, with the total stock of housing increasing to 11 million properties.

Since March this year, national home values have been on a recovery path, rising 4.9% through to the end of August. This upswing has erased about half of the preceding downturn between April 2022 and February 2023, when national home values saw a 9.1% decline. Despite the lingering economic challenges, home values are now just 4.6% shy of the peak in April 2022.

These growing values have unfolded against the backdrop of a cost of living crisis, low consumer sentiment levels, and four increases in the cash rate so far this year. Despite this, a few factors have helped sustain the rise in housing values such as net overseas migration, non-borrowing property purchases, and a lack of supply.

CoreLogic currently sees the housing market outlook as uncertain. While borrowing is constrained by a relatively high serviceability buffer, the RBA board is expected to continue its pause in the cash rate. 

Though the economic performance is set to unwind, this brings along a risk of a rise in unemployment, which could pose a higher degree of risk for mortgage serviceability. CoreLogic predicts some of the recent recovery heat could fade by the year-end, while a more robust recovery in housing values will be limited until credit conditions loosen.

Knowing the market as a homebuyer

Supply may remain one of the main drivers in home values. Despite the national cabinet’s announcement of 1.2 million homes and the Housing Australia Future Fund set to pass in parliament, Master Builders Australia predicts a drop in new home starts of 2.1 per cent to around 170,100 for 2023-24. However, long term supply is predicted to pick up, with Master Builders forecasting that “new home starts will peak to just over 241,000 in 2026-27”.

Yet, the short term presents a number of challenges for prospective home buyers. On one hand, rising home values and short-term constraints in supply may pose challenges. On the other hand, the potential easing of credit conditions and a halt to cash rate hikes could provide some relief for existing borrowers.

Borrowers who feel like they could be getting a rate may want to look into a home loan refinance. At Mozo, we have data on a number of home loan providers so that you can compare rates and features.

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Last updated 18 September 2024 Important disclosures and comparison rate warning*

Refinance home loan comparisons on Mozo

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  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.99 % p.a.
    Fixed 2 years
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • 3 Year Special Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    This home loan is available for purchase or refinance, complete with 1, 2 or 3 year fixed rate options. Minimum 10% deposit required.

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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