Property prices jump, mortgage rates drop: what it means for Aussie borrowers

By Polly Fleeting · · 4 min read
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Australia’s property market appears to be bouncing back as median property values have gone up across most capital cities. Plus, home loan lenders have continued to slash rates - so what does this mean for Aussie borrowers? 

CoreLogic’s latest Hedonic Home Value Index which showed that housing values jumped up by 1.1% nationally from last month. 

CoreLogic’s Head of Research Tim Lawless says that based on the current run rate growth, he predicts that prices will hike up even more and believes the national index will probably hit another high over the next two months. 

“Structural factors may also be at play, including a rise in borrowing capacity following changes to serviceability assessment from APRA in July 2019, and the dominance of owner occupier buyers (rather than investors) through the recovery phase to date.” 

“With lenders favouring ‘high quality’ borrowers, buyers with a large deposit and low level of debt relative to their incomes, are likely to be those who receive the lowest mortgage rates - another factor that could be supporting demand at the more expensive end of the market.”

Sydney and Melbourne’s property markets saw the biggest jump not only month on month but year on year as well - with Sydney hiking up by 10.9% from last year and Melbourne by 10.7%. And notably, Sydney’s house median value has crept above $1 million again, sitting at $1,001,357. 

Rundown of the current Australian Capital City property market 

City Month ChangeYear ChangeTotal Dwellings Median Value House Median ValueUnit Median Value
Sydney+1.7%+10.9%$872,934$1,001,357$763,962
Melbourne+1.2%+10.7%$689,088$809,719$583,294
Brisbane+0.6%+1.9%$503,265$551,766$384,396
Adelaide+0.1%+0.4%$439,453$477,129$325,243
Perth+0.3%-4.0%$442,691$458,582$357,593
Hobart+0.8%+5.0%$488,968$520,201$398, 394
Darwin-1.4%-7.8%$386,345$469,526$271,847
Canberra+0.8%+4.1%$631,862$704,865$445,354

Why could now be a good time to take out a home loan? 

With house prices only expected to rise and mortgage rates at an all time low, for Aussies looking to take out a home loan - if you were already thinking about jumping into the property market now may be a good time to do it. 

While the Reserve Bank of Australia (RBA) didn’t cut its official cash rate in February experts are predicting they will cut tomorrow, thus 13 mortgage lenders in Mozo’s database made cuts to existing loans or introduced new competitive home loan products in the last month. 

Currently, the average variable rate amongst lenders is 3.67%, compared to 4.34% this time last year. Plus, with a potential RBA cut coming either this month or in the next few months, rates could drop even lower across more lenders.

RELATED ARTICLE: Australia’s cheapest home loans unveiled 

If you are itching to get your hands on a property and can’t wait to lock in a killer home loan, check out some mortgage options below or jump over to our home loan comparison tool. 

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Last updated 24 November 2024 Important disclosures and comparison rate warning*

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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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