Housing Retrospective: Thirty years of Australian property trends
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
- Housing affordability and interest linked to movements in the RBA cash rate
- Remote working has risen due to the pandemic
- Climate change and extreme weather influencing property purchasing decisions
- Housing is becoming increasingly unaffordable for many Australians
- Foreign investors and population growth driving extreme demand in Australian property market
- Where will the property market go next?
Every market ‘up’ has a ‘down’ if you zoom out enough
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
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
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
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
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
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?
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.
Compare and save on home loans - last updated 29 March 2024
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Offset Home Loan
Package, Owner Occupier, LVR<60%, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.15% p.a. variable6.40% p.a.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.
CompareCompareOffset Home Loan
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.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.40% p.a.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.40% p.a.
- Upfront fees
- $350
- Ongoing fees
- $248.00 yearly
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Macquarie Offset Home Loan
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Mozo experts choice awards won:
- Exceptional Value Home Lender - 2024
Express Home Loan
Owner Occupier, Principal & Interest, LVR <90%
interest rate
comparison rate
Initial monthly repayment6.01% p.a. variable6.14% p.a.Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.
CompareCompareExpress Home Loan
Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- Upfront fees
- $134
- Ongoing fees
- $10.00 monthly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $5,000
- maximum borrowing amount
- $3,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Bendigo Bank Express Home Loan
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Mozo experts choice awards won:
- Fixed Rate Home Loan - 2024
- Investor Fixed Home Loan - 2024
Fixed Rate Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment5.99% p.a.
fixed 2 years6.24% p.a.Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.
CompareCompareFixed Rate Home Loan
Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.
- interest rate
- 6.29% p.a.
fixed 3 years
- comparison rate
- 6.30% p.a.
- interest rate
- 6.29% p.a.
fixed 3 years
- comparison rate
- 6.30% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $395.00
- Extra repayments
- yes, up to $25,000 during fixed period - fee applies
- Redraw facility
- no
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $20,000
- maximum borrowing amount
- $2,500,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the BCU Bank Fixed Rate Home Loan
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Featured Product
Ultra Low Rate <95% LVR
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.30% p.a. variable6.58% p.a.Only 5% deposit required to apply. Low upfront costs to pay. No LMI Required. Unlimited Redraw and additional repayments. No Application or ongoing fees. No guarantors or equity sharing required. New Purchase - Metro only.
CompareCompareUltra Low Rate <95% LVR
Only 5% deposit required to apply. Low upfront costs to pay. No LMI Required. Unlimited Redraw and additional repayments. No Application or ongoing fees. No guarantors or equity sharing required. New Purchase - Metro only.
- interest rate
- 6.30% p.a. variable
- comparison rate
- 6.58% p.a.
- interest rate
- 6.30% p.a. variable
- comparison rate
- 6.58% p.a.
- Upfront fees
- $790
- Ongoing fees
- $0.00
- Discharge Fee
- $795.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $350,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Sucasa Ultra Low Rate <95% LVR
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.For refinancers only. 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 in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. 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 in as little as 10 minutes.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
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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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