Property prices up 7.4% before COVID-19, so where to now?

Rising unemployment and social distancing measures haven’t been all that friendly to the Aussie property market. But before the coronavirus pandemic sent shockwaves through the economy, housing prices were enjoying a meteoric rise. 

According to data released by the Australian Bureau of Statistics this week, the value of Australian homes rose 1.6% over the March quarter, and 7.4% in the 12 months leading up to March 31.

Sydney and Melbourne saw the highest growth rates, with home values in the two major cities jumping up 10% and 10.4%, respectively. Among capital cities, only Perth and Darwin recorded decreases over the year.

Property expert Michael Yardney of Metropole Property Strategists said in his June update that Australia’s market numbers may have dropped since March but that restrictions on property are already starting to ease and this will help fuel a bounce back.

“Our property market is showing resilience and there are some positive signs,” he said. 

“After a market fall in March and April, the number of transactions occurring and properties listed for sale is starting to pick up. It’s likely that it’s going to be less of a bad turn ahead than people expected. There are greenshoots as we like to say.”

Will things become more affordable for first home buyers?

Despite forecasts warning that property prices could drop by as much as 30%, the market has proven to be remarkably resilient so far. According to data from CoreLogic released earlier this month, national property prices fell only 0.4% in May.

Average home values were down 0.5% among capital cities, but there were a handful of exceptions, including Adelaide, Hobart and Canberra, where prices lifted slightly. 

CoreLogic head of research Tim Lawless said we won’t have a clear idea where prices are heading until the support flowing through to households from banks and the Government is finally cut off. 

“Eventually government stimulus will wind back and borrower repayment holidays will expire. In the absence of these policies, housing values could come under some additional downwards pressure if economic conditions haven’t picked up towards the end of the year,” he said.

For its part, the Government is offering cash grants of $25,000 to eligible Australians planning to build new homes or make substantial renovations to existing ones via the HomeBuilder scheme.

While the program has potential to boost residential construction and help reignite the economy, it’s drawn criticism for its oddly specific criteria, which require applicants to be spending upwards of $150,000 to be eligible.

Mozo’s property expert Steve Jovcevski said grants like the HomeBuilder scheme don’t go far enough, and the Government needs to expand its policy playbook if it wants to help first home buyers get on the market.

“While these policies might help a select few, the Government should start seriously considering things like waiving stamp duty for everyone. This would obviously help first home buyers by allowing them to potentially buy a house instead of a unit,” he said.

If you’re secure in your job and are looking to take your first steps up the property ladder, head over to our home loan comparison page for an overview of what’s available, or browse the selection below.

Home loan comparisons on Mozo - last updated 11 August 2022

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  • Variable Home Loan 70

    interest rate
    comparison rate
    Initial monthly repayment
    3.10% p.a. variable
    3.12% p.a.

    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 30% deposit required.

  • Unloan Variable

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    interest rate
    comparison rate
    Initial monthly repayment
    3.14% p.a. variable
    3.06% 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.

  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    3.79% p.a. variable
    3.79% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required.


* 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, loan amount and term entered. 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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