Housing Retrospective: Thirty years of Australian property trends

Rows of black floppy desks on a red background.

Dude, 1991 was wild. NASA launched the Hubble space telescope, printed jumpers were king, and houses near Bronte Beach in Sydney only cost $307,729. Them’s were simpler times. 

But if that hasn’t blown your mind already, a new progress report from Aussie Home Loans reveals just how much the Australian property market has evolved over the last thirty years. 

So dial up your modems, grab a Capri-Sun, and prepare to enter the time vortex. What have we learned about property since 1991?

Every market ‘up’ has a ‘down’ if you zoom out enough

A white cartoon house riding an upwards trending graph line on a blue background.

It’s inevitable that housing prices will escalate overtime, but it’s still staggering to comprehend that the overall capital growth in Australia over the last thirty years was 381.2%.

In that period of time, there were 7 booms and 7 busts, demonstrating the continuous ebb and flow of the market. The sustained value increases (booms) lasted an average of 41 months and saw +34% in growth, while the peak-to-trough declines (busts) usually only lasted a year, with average falls of -4.3%.

The current housing market upswing (which started in Oct. 2020) has lasted at least 17 months and produced the highest annual growth rate in housing values for the last thirty years.

Despite the heat, though, there may be cooling wobbles in the near future.

Housing affordability and interest linked to movements in the RBA cash rate

A hand pushes up a colorful bar on a bar graph. Background is deep purple.

The property market is highly influenced by the cost of housing finance, which the RBA cash rate directly affects.

The cash rate is like a handbrake the central bank uses to control inflation: if they pull the brake by raising the cash rate, they’re encouraging people to conserve their money to halt inflation. If they release the brake and lower the cash rates, interest rates across the board tend to lower – especially on home loans. This encourages consumers to pump money into the economy instead of saving it. 

Thirty years ago, the cash rate was as high as 12% due to high inflation. As of March 2022, the cash rate has been fixed at a record low 0.1% for 17 consecutive months.

However, now that inflation is on the rise again, many experts expect the RBA will lift the cash rate as early as August. This would be the first cash rate increase since November 2010.

RELATED: Will interest rates go up in 2022?

Remote working has risen due to the pandemic

A claymation man debates while working on his laptop.

The pandemic has certainly accelerated the trend towards remote work, which greatly affects people’s housing preferences. The ABS has noted an increase in city-to-country migration as workers seek out calmer locales, while migration away from regional Australia hasn’t been nearly so eager. 

According to Corelogic, this demand in the regions has pushed up prices by almost +40%, compared to +21% in the capital cities.

Climate change and extreme weather influencing property purchasing decisions

A cartoon wind turbine beside a city on a field of blue.

Big weather and rising temperatures have affected property preferences enormously, and are poised to drive up home insurance premiums in the near future. This is one of many factors making home-ownership prohibitively expensive for some buyers.

Housing is becoming increasingly unaffordable for many Australians

A scared piggy bank caught between a house and rising red graph arrow and coins.

Surging prices and strong capital growth means that many Australians have been left behind in the property scramble. The latest figures from REIA show that housing affordability has dropped as much as nearly 6% in some areas, with many Aussies directing between 37-46% of their incomes towards mortgage repayments.

There are many other factors worsening the property gap, too, such as the rising cost of living affecting peoples’ ability to save for a deposit. As a result, there have been many cries for the federal government to make relieving housing stress a top priority.

Foreign investors and population growth driving extreme demand in Australian property market

A hand drops coins into a green model house. Purple background.

Australian property has been a magnet for overseas migration, with many advantages appealing to foreign investors and new migrants. 

ABS migration data reveals that the combined population of the eastern states increased by 50% over the last thirty years (an influx of around 6.9 million people). The eastern states saw the majority of this growth, with the coastal markets around major metropolitan hubs presenting attractive opportunities. This combined with remote work has put great upward pressure on coastal property prices.

Where will the property market go next?

An hour glass on a red background.
Photo by Daniele Franchi.

While it’s impossible to predict the next thirty years, this retrospective report highlights the importance of long-term thinking. 

“Trying to pick what the market will do in the short-term can be distracting,” says CEO of distribution of the Lendi Group, Brad Cramb. “The last thirty years have shown us that property prices will invariably go up over time, so we encourage Australians not to get caught up in this short-term thinking.”

Keeping a finger on the pulse can predict where we’ll go for now, but unforeseen winds of change (like the pandemic) will always buffett us in new directions. So despite grim predictions about housing affordability, there is always hope for first-home buyers.

If you’re in the market for a home loan, check out our comparison tool to get started, or browse options below.

Home loan comparisons on Mozo

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Last updated 21 June 2024 Important disclosures and comparison rate warning*
  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • 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.

  • Offset Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

  • 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.

  • Discount Variable Home Loan

    • Owner Occupier
    • LVR<70%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.01 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

  • Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.06 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • Fixed Rate Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Fixed 3 years
    Comparison rate
    6.15 % p.a.
    Initial monthly repayment
    $3,027

    Additional repayments of up to $10K per fixed year. Interest rate discounts available. Waiver of $499 application fee when combined with an Orange Advantage Home Loan.

  • The Better Home Loan Special Offer

    • Owner Occupier
    • Principal & Interest
    • LVR<80%
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a variable rate home loan with a bunch of features from Police Credit Union. Make extra repayments at any time without penalty. No monthly, annual or upfront fees. Free online redraw. Minimum 20% deposit. Qualifying criteria applies. Minimum loan amount is 200K. For new customers only. Mozo Experts Choice Home Lender Credit Union of the Year 2023.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Offset Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.42 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.59 % p.a.
    Fixed 3 years
    Comparison rate
    7.06 % p.a.
    Initial monthly repayment
    $3,190

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

image of houses

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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.

^See information about the Mozo Experts Choice Home Loan Awards

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