The Australian housing market 2014 to 2019: Where is it now?

Tara McCabe

Wednesday 27 November 2019

As the decade draws to a close, housing prices go up and interest rates go down, it seems only fitting to take a look back at how the property market has changed in the past five years. What did it look like in 2014 and where is it now? 

Row of terraced houses in Sydney.

Let’s take a look at five of Australia’s major cities and see how their property markets have fared since 2014**:

Sydney

 

House prices then:

At the lower end of the scale, 22% of Sydney suburbs had a median house price less than $500,000, while at the higher end, 34% of city suburbs had an average house price of more than $1 million.

House prices now:

Now, you’ll find a house for less than half a million dollars in just 5% of Sydney suburbs. On top of that, the proportion of suburbs with a median house value of $1 million or more has risen to nearly 50%.

It’s not surprising that in 2014 Sydney still had the priciest suburbs of any Australian city. Even five years ago, the average house price in the Eastern suburb of Vaucluse was a shocking $3,089,670. But if you thought that was bad, it now stands at $5,070,177.

Melbourne

House prices then:

39% of suburbs had a median house value of less than $500,000 and only 13% of suburbs had houses priced, on average, above $1 million.

House prices now:

The number of suburbs with houses valued at less than $500,000 in Melbourne has now dropped to a measly 6%. Plus, 33% of Melbourne suburbs now have a median house price of at least $1 million.

Known for deconstructed lattes and great theatre, Melbourne is not only the second largest city in Australia but it also comes in second on the list of priciest cities to live in. Indeed, if you wanted to set up home in affluent, inner city suburb Toorak, you could easily be looking at taking out a home loan of $4,205,193. That’s almost double what the median house price was for the same area in 2014.

RELATED ARTICLE: Locking in a fixed rate home loan? Your revert rate could be 1.00% higher

Brisbane

House prices then:

In 2014, 50% of Brisbane suburbs had a median house value of less than half a million dollars and only 3% had average house prices of at least $1 million.

House prices now:

The percentage of suburbs with median house prices less than $500,000 has now dropped to 39% and the proportion of suburbs with a median house value of at least $1 million has more than doubled.

Often thought of as one of the more affordable cities on the Eastern side of Australia, even Brisbane has seen a considerable rise in house prices in the last five years. 

Adelaide

House prices then:

Back in 2014, you could find a house under $500,000 in nearly 60% of suburbs in Adelaide and only 2% of suburbs had median house values of at least $1 million.

House prices now:

Astonishingly, the percentage of suburbs with a median house value of approximately $1 million has actually tripled in the past five years, while the proportion of suburbs with median house prices of less than half a million dollars has dropped to less than 50%.

RELATED ARTICLE: Why now is the perfect time to pay more on your mortgage

Perth

House prices then:

24% of Perth suburbs had a median house value of less than $500,000 while 15% of suburbs had an average house price of $1 million.

House prices now:

44% of suburbs in Western Australia’s capital city now have a median house value of less than half a million dollars with the portion of $1 million house-suburbs dropping to 9% in 2019.

In contrast to Australia’s other major cities, house prices have actually dropped in Perth within the past five years. Experts attribute this slump in the city’s property market to the end of the mining boom and the decrease in the number of people heading to Australia’s largest state.

The below table shows the percentage of suburbs with a median house value below $500,000 in 2014 and then again in 2019.

20142019
Sydney22%5%
Melbourne
39%6%
Brisbane50%39%
Adelaide59%43%
Perth24%44%

The below table shows the percentage of suburbs with a median house value of $1 million.

20142019
Sydney34%47%
Melbourne13%33%
Brisbane3%7%
Adelaide2%6%
Perth15%9%

Interest rates, then and now

While house prices are steeper than ever before, interest rates are actually lower than they were five years ago.

In 2014 the average interest rate for a $400,000 owner occupier, principal and interest home loan was 5.21% p.a. (80% LVR), whereas in 2019 it is now 3.72% p.a. for the same type of loan. This means that if you had borrowed this amount back in 2014, you might have been looking at average monthly repayments of $2,388. But with the lower average interest rate in 2019, your repayments for the same loan amount, might be approximately $2,050***.

Of course there’s always two sides to every story. Back in 2014, the official cash rate, as set by the Reserve Bank of Australia, was 2.50%, that’s 1.75% above what it is today. The official cash rate fell to 0.75% this October, following not one but three cuts in 2019. These cuts were made by the RBA in an attempt to help out the struggling Australian economy. Not to mention increasing numbers of unemployment since 2014 and the increased cost of living across the country.

Looking ahead to 2020

Home loan interest rates may drop even more in 2020, if as experts predict, the Reserve Bank of Australia makes further cuts to the official cash rate, early next year. But with that, there’s also a strong chance that house prices will continue to rise in most cities in Australia.

So assuming house prices continue to go up in most places, you may want to strike while the iron is hot, or while interest rates are down. If you do want to take advantage of current home loan interest rates, why not head to our home loans comparison page, or take a look at the home loan deals below.

* *Statistics taken from CoreLogic’s Mapping the Market survey, published in September, 2019.
***Average home loan interest rates from 2014 and 2019 taken from the Mozo database.


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