Home loan monthly payments could now cost over $7,600 for the median Aussie house

Woman worried about looming Sydney house prices hitting a record high

The Australian property market has fully recovered from the 2022 downturn, reports Domain. 

Reserve Bank interest rate hikes drove price falls in 2022 because home loan affordability became suddenly stretched. But over 2023, the steep cost to entry didn’t prove much of an obstacle for home buyers. 

In Sydney, house prices have hit a new record high, regaining their -9.3% losses in 2022. Adelaide and Perth have hit their previous peaks once more, while Brisbane has smashed its own housing records and unit gains with a 16-year high. 

Only Canberra has lagged behind: the Australian capital saw house prices hit a new trough in 2023, sitting at -12.9% below their previous 2022 peak. 

Median property prices (December quarter 2023, source: Domain)

City
House
Unit
Sydney
$1,595,310
$795,994
Melbourne
$1,047,273
$579,506
Brisbane
$888,285
$524,202
Adelaide
$875,034
$484,407
Canberra
$1,024,214
$625,597
Perth
$742,390
$387,218
Hobart
$706,728
$535,426
Darwin
$640,806
$371,096
Combined capitals
$1,094,539
$638,372

These new home values mean significantly inflated costs for homeowners repaying a mortgage. 

Mortgage repayments could be over $7,600 monthly for the median Australian house. For the median unit, repayments would cost over $4,400. And either way you slice it, the 20% standard home loan deposit costs six figures. 

Price
Monthly repayments
20% deposit
House
$1,094,539
$7,632
$218,908
Unit
$638,372
$4,451
$127,674

Repayments were calculated using the Mozo database average variable interest rate (6.85% p.a.) for owner-occupied properties (P&I, LVR < 80%) with 25-year terms. Average current on 23 January 2024.

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Repayment change if rates go up

Domain warns Aussies that high home loan interest rates are still smothering price growth, so this recovery is slower than it would have been otherwise. 

However, with rate cuts potentially on the horizon in late 2024, the property market is prepared to heat up like a rocket.

“This year will once again bring Australia’s short housing supply into the spotlight, especially given the recent news that NSW won’t meet its housing target,” explains Domain chief economist Nicola Powell.

So what chance do home buyers still have? With potential pressure easing off the rental market and tax cuts to flow through from July 2024, potentially lots.

“Set realistic expectations,” says Powell. ‘“If you decide to enter the market this year, you may benefit from being flexible with your area preferences.”

First home buyers have a leg up with first home owner grants. In many states, these government schemes let individuals buy property alone or with another eligible person for deposits as small as 5%. 

You can check out the hottest suburbs to get started, or compare home loans in the table below.

Compare home loans - last updated 25 February 2024

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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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