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The extraordinary rise in property values in Australia shows that the average Australian property buyer would spend $150,000 less if he or she could buy five years earlier.
CoreLogic data analysis over five year shows alarming rises in median property prices in Australia’s capital cities. In some cases the median home price has increased by more that $200,000.
In March 2016 the median value – which includes both apartments and free-standing homes – of an Aussie capital city property was $550,000.
Fast forward five years and that same hypothetical property is worth $693,936 – an increase of $143,936 or a jump of 26.17 per cent.
Lender’s Mortgage Insurance (or LMI), is only available for deposits less than 20 percent. The rapid rise of property prices has outpaced this.
LMI that a buyer pays when he or she takes out a loan is dependent on the amount of the loan, its deposit, property values, and many other factors.
However, a larger deposit will result a lower monthly mortgage payment in the long-term.
Genworth’s LMI calculator reveals that a first-home buyer would be subject to an LMI premium of more than $23,000 if they had a 5% deposit for a $550,000 property. This applies to loans with terms between 36 and 40 years.
This hypothetical doesn’t take into account today’s historically low rates or the average wage in 2016, but simply adds to the weight for median prices compared to five years ago.
The stark contrast is evident when the capital city is demolished. This is because buyers are eager to get on the market.
Hobart’s 2016 median property value was $341 500, making it the most affordable city in the country. Today, that median has slid up to an eye-watering $548,686 – a rise of just over 60 per cent.
The median property sale in Sydney, Australia was $730,000. This number is now close enough to the million-dollar mark, at $928.028.
According to Domain’s Senior Research Analyst Dr Nicola Powell – who today released independent figures showing an equally stratospheric price rise – the hike in prices comes amid a perfect storm for buyers and sellers.
Dr Powell stated that record low interest rate, household savings improvements and lower listing volumes, lifestyle modifications after the lockdown, consumer mood at an 11-year peak, and returning cashed up expats, along with government incentives, have fueled housing demand and a strong market performance.
“It’s the first year in a row that price growth across combined capital city cities exceeds regional areas,”
Ms Powell stated, “First-time homebuyers in Sydney are seeing prices rise faster that their ability to make more at work.”
“This is the fastest rate of capital growth that homeowners have ever seen. Dr Powell stated that prices rise faster at the top end of the market, followed closely by the middle-point. It is still difficult to increase your size.
“First-home buyers find low mortgage rates more affordable, but it is hard to save for a deposit because of the rapid rise in prices and low wages growth.
PROPERTY PRICE PRICES FIVE YEARS ADVAILABLE
CoreLogic March Home Value Index 2016, CoreLogic
| City: | Median dwelling value: |
| Sydney | $730,000 |
| Melbourne | $560,000 |
| Brisbane | $470,000 |
| Adelaide | $415,000 |
| Perth | $495,000 |
| Hobart | $341,500 |
| Darwin | $505,000 |
| Canberra | $540,000 |
| Combined Capitals | $550,000 |
PROPERTY PRICE: NOW
CoreLogic March Home Value Index 2021
| City: | Median dwelling value: |
| Sydney | $928,028 |
| Melbourne | $736,620 |
| Brisbane | $548,260 |
| Adelaide | $486,555 |
| Perth | $505,850 |
| Hobart | $548,686 |
| Darwin | $451,408 |
| Canberra | $727,032 |
| Combined Capitals | $693,936 |
This website is intended to provide general information only and not to be a source or financial advice. This information was not created without taking into consideration your financial situation, personal objectives, and specific needs. Before you act, you should assess the suitability of any information on this site in light of your financial situation, goals, and needs.
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