How big was the property boom? Australian house prices soar to record heights

A fancy blue house on a wet street in the evening
Photo by Ralph Kelly.

The Australian Bureau of Statistics (ABS) has officially confirmed what we all guessed in 2021: housing prices went kaboom. 

According to their newly released data, Australian residential property prices in the capital cities ballooned by 23.7% throughout the year – the strongest annual growth on record. 

However, the headliners were not the classic Sydney-Melbourne duo we’d expect. Instead, the speedster capitals were:

  • Hobart (+30%)
  • Canberra (+29%)
  • Brisbane (+28%)
  • Sydney (+27%)
  • Adelaide (+24%).

Each of the above experienced their largest annual rise since the ABS began tracking house prices in 2003.

Meanwhile, Melbourne (+20%) trailed behind the pack despite experiencing its highest June quarter surge since 2010. Perth and Darwin brought up the rearguard, with only 16% and 13% rises, respectively.

Residential property price index graph from the ABS.

ABS head of prices statistics Michelle Marquardt remarked that these results were consistent with a host of market indicators, including seductively low fixed-rate home loans

“Record low interest rates and strong demand have continued to support growth in property prices,” she observed.

This growth pushed the total value of Australia’s 10.8 million residential homes to over $9.9 trillion in December 2021 (a $2 trillion increase from December 2020).

Australian mean dwelling prices, December quarter, bar graph of capital cities.

As a result, the mean price of Australian residential dwellings is now $920,000, with NSW registering as the priciest state with an average $1.2 million per property.

Australian housing affordability pushed to crisis point, but there is hope on the horizon for home-buyers

Orange smokey clouds at twilight above a white suburban house.
Photo by Gus Ruballo.

This latest announcement seems pretty grim, with the Real Estate Institute of Australia (REIA) estimating that borrowers spent an average of 37% of their incomes on mortgage repayments in December 2021. 

But while there are many justified calls for federal solutions to the affordability crisis, relief glints on the horizon for first time home buyers

Many experts predict that prices will peak at some point this year, with some estimating a drop of -10% in 2023. We may already be seeing the impending wobbles, since property prices in Sydney saw their first drop since 2020 just this month. 

Furthermore, fixed-rate home loans – whose affordability partially fueled the property boom – are poised to rise again later this year, which will likely cool the red-hot market. 

Though it can be hard to gauge where the housing market will take us specifically, home loan comparison and analysis of 2022’s property trends will be key to breaking in.

Looking for an edge in the property market? Off-market buying could be for you. 

Alternatively, you can browse and compare affordable home loan options below.

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