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

By Evlin DuBose · · 2 min read
Fact Checked
Advertiser disclosure
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.

Home loan repayment calculator
Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can compare more home loans here.
Last updated 5 October 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

Promoted

  • 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.

image of houses

Need help with your Home Loan?

Whether you're looking to purchase a new home or refinance your existing loan, our friends at Lendi can help! Lendi’s expert advice is completely free of charge.

Learn more

* 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.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Compare home loans