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Property market update

Australians have long had a love affair with property.

Australians have long had a love affair with property.

Data from Mortgage Choice's Evolving Great Australian Dream whitepaper shows 90% of Australians still consider property ownership to be the ‘Great Australian Dream'.

Of course, with property prices rising across some of the capital cities, it's becoming harder for some Australians to achieve this dream.

But while property prices are rising in some markets, it's fair to say they are falling in others. At the core, property prices are driven by four key factors: supply versus demand, the cost of credit, access to credit and overall employment levels.

This article provides an in-depth analysis of the different property markets and what this may mean for you and your property plans.


Sydney continues to be Australia's strongest performing capital city in terms of property price growth, with low interest rates, strong employment levels and a shortage of property supply all helping to drive up dwelling values.

According to the latest data from CoreLogic, median dwelling values have soared 16% across the capital city to $860,000 over the last 12 months.

Median house prices are up 17.4% to $990,000, while median unit values are up 9.8% to $740,000.

In Sydney, the cost of credit continues to sit at record lows. Australia's lenders are hungry for business and are willing to offer home loan interest rates below 4% p.a. in order to attract and retain customers.

In addition, employment is strong, which is giving residents the confidence they need to buy. Good employment opportunities has also caused the city's population to rise, which is putting increased pressure on property supply.

At present, property supply isn't meeting demand. Data from the Australian Bureau of Statistics (ABS) found 201,929 home loans were written over the 12 months to February 2017 – which is incredibly high by historical standards. This surge in home loan demand has put even more pressure on property supply – pressure the capital city has tried to relieve by increasing the level of dwelling construction.

75,074 dwellings were approved for construction throughout the 12 months to February 2017 – up 5.6% on the year prior.

Despite this growth in dwelling construction, demand continues to outstrip supply – forcing up property prices.

Looking ahead, we would expect to see property prices continue to rise in the capital city (albeit at a slightly slower pace by comparison to the past few years).


The Melbourne property market is enjoying a similar story to Sydney.

Over the past 12 months, property prices have risen by 15.3% to $650,000. Median house prices are up 16.5% to $735,000, while median unit prices are up 4.1% to $518,000 – according to CoreLogic.

Looking ahead, we would expect property prices to rise further across the capital city, thanks to low interest rates and strong employment opportunities in the area.

Melbourne, like Sydney, is a multi-economy city, which means the city is dominated by more than one industry.

While this remains the case and the cost of credit continues to sit at affordable levels, property values should continue to rise.


Brisbane's property market tells a slightly different story to Sydney and Melbourne.

Unlike its eastern seaboard counterparts, Brisbane has enjoyed steady (not rapid) property price growth over the last year.

According to CoreLogic, property prices have risen 2.1% to $481,000 across the capital city within the last 12 months.

Median house prices are up 3.6% to $541,500, while median unit values have grown 1.1% to $368,000.

This slightly subdued growth in property values can largely be attributed to the fact that property supply continues to keep pace with demand.

According to the ABS, the total number of dwellings approved for construction between March 2016 and February 2017 was 44,502, a 12% drop from the same period the previous year.

When we see a drop off in construction activity like this, it's because the city simply doesn't need more stock. Brisbane's stock levels are in-line with its property demand levels, which is causing property values to enjoy relatively subdued growth.

Looking ahead, it's likely Brisbane will continue to perform relatively well, with property prices growing between 2% and 5% each year.

As such, whether you are a property investor or owner occupier, the Brisbane property market could represent good value to those who are prepared to hang onto their property long-term.


Adelaide's housing market is similar to Brisbane's, with the city's median dwelling price rising 2.2% over 12 months to $430,000.

The median house price in Adelaide has grown 2.4% over 12 months to $457,000, while the median apartment price saw a drop of 0.2% to $368,000.

Looking ahead, we could see property values start to climb slightly higher as home loan demand across the capital city continues to rise.

Data from the Australian Bureau of Statistics shows 46,824 home loans were written between March 2016 and February 2017 - up 5.7% on the prior corresponding period.

Given that home loan demand is increasing across the capital city, we can expect to see sound property price growth as more buyers compete for the stock on the market.


The end of the mining boom and a weakened economy have had a negative impact on the property market in Perth.

Data from the Australian Bureau of Statistics shows home loan demand has dropped 9.2% over the last 12 months.

With this in mind, it is no surprise to see that property values have also dropped slightly.

CoreLogic figures show property prices across the capital city have fallen 6% in the last 12 months to $472,200.

Over the last year, the median house price has dropped 6% to $457,800, while the median unit price has dropped 5.9% to $410,000.

This drop in property values spells good news for first home buyers. With interest rates sitting at record lows and property values stagnating, now is a great time for first home buyers and even potential investors to review their options and consider buying property.

You might also be interested in:

Mortgage Choice and Core Data, Evolving Great Australian Dream whitepaper, January 2017
CoreLogic Hedonic Home Value Index, April 2017 Results
Australian Bureau of Statistics, Housing Finance Australia, February 2017
Australian Bureau of Statistics, Building Approvals, February 2017
Posted in: Property market

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