Where is the Australian housing market right now?

From the impacts of rising interest rates to the unpredictable outcomes of a global pandemic, Australia’s property market looks very different to anything we’ve seen before.
Ava Crawford
Written by
Ava Crawford
Imogen Baxter
Reviewed by
Imogen Baxter
Last updated
February 12, 2024
0 minute read
Table of contents
power lines over a classic australian cottage which has gone up in value over the last decade

If you’ve been considering entering the Australian property market in 2023, chances are you’ll be surprised at what you find. From the impacts of rising interest rates to the unpredictable outcomes of a global pandemic, Australia’s property market looks very different to anything we’ve seen before.

Though the latest data reflects an annual decline in property prices, this doesn’t necessarily reflect a level of affordability - especially when we factor in the record highs that we have seen in the last years. It does mean that property values have seen a downturn across the country. Housing values are less, while mortgage repayments creep upwards (thanks to those cash rate hikes from the Reserve Bank of Australia, or RBA).

Despite a downturn, figures from CoreLogic show that dwelling prices sit significantly higher than they did at the start of the pandemic in March 2020. This price growth has been sustained even as property prices fall relative to the peaks of the 2021-2022 property boom.

While house prices might be starting to fall - to an extent - the Australian housing market is far from stable.

A nationwide housing crisis

Though most discussions around the housing market focus on capital cities, particularly Sydney and Melbourne, the impacts can be felt nationwide.

Let’s look at the property market state by state, using data from CoreLogic and the Australian Bureau of Statistics (ABS).

  • New South Wales:
    The median price for a dwelling in metropolitan Sydney is $1,014,393 — even a unit in Sydney has a median price of $776,780. Regional dwellings throughout the rest of NSW have a median price of $686,149.
    NSW housing prices grew to record highs during the recent property boom, climbing by over 27%, but have fallen over 12% since the peak in January 2022.
    The average weekly salary in NSW is $1,810.20.
  • Australian Capital Territory:
    The median dwelling price in Canberra is $828,175.
    Canberra housing prices are down 9.5% since their peak in June 2022, but they did grow 38.3% over the pandemic period.
    The average weekly salary in the ACT is $2,019.10.
  • Victoria:
    Victorian property prices grew by 17.3% to peak in February 2022 and have fallen 9% since then. In recent months pricing appears to have stabilised.
    The median property price for a capital city dwelling in Victoria is currently $747,322.
    The average weekly salary in Victoria is $1,793.90.
  • Queensland:
    There was dramatic growth in property prices for QLD over the pandemic, with Brisbane’s trough-to-peak price growth totalling 42.7%. This peaked in June 2022 and has since fallen 10.9%.
    The median dwelling price for a home in Brisbane is $698,071. Regional dwellings in Queensland have a median price of $557,316.
    The average weekly salary in QLD is $1,760.70.
  • South Australia:
    Property prices in Adelaide have dropped off slower than they have elsewhere, having fallen only 2.4% since their July 2022 peak. This is a big deal considering Adelaide’s Covid-19 trough-to-peak growth of 44.7%.
    You’ll now find the median capital city dwelling price in South Australia hovering at $645,721, with regional dwellings sitting at $359,075.
    South Australia’s average weekly salary is $1,658.
  • Western Australia:
    The median dwelling price in metropolitan WA is $567,111, which drops to $429,455 for regional dwellings.
    The pandemic property boom saw Perth’s mostly stable property prices rising by 25.9%, peaking in July 2022. They have only dropped off by 0.4% since then.
    The average weekly salary in WA is quite high, at $1,988.55 — presumably reflecting the large proportion of mining work.
  • Northern Territory:
    Though NT prices grew 31.1% over the pandemic, they have since fallen 2% from their August 2022 peak.
    The median NT dwelling price is $492,465.
    The average weekly salary in the NT is $1,744.10.
  • Tasmania:
    Property prices have been falling rapidly in Hobart since their May 2022 peak, dropping by 12.9% in less than a year. This was after significant growth over the pandemic property boom, where we saw 37.7% growth.
    The median dwelling price now sits at $650,689 for Hobart and $507,154 for regional Tasmania.
    The average weekly salary in Tasmania is $1,586.40.

It’s especially important to consider the median salaries as wage growth in Australia cannot keep up with the inflation rate. ABS data for 2022 put annual wage growth at 3.3%, which is a 4.5% fall when adjusted for inflation - which continued to soar. For a full comparison, inflation grew 7.8% over 2022.

For the average Australian, this means that without drastically altering your financial position, it’s very difficult to sustain your borrowing power or to keep repayments under control, with inflation climbing upwards and wages stagnating.

How can I buy a home in Australia as a migrant?

Australia is second highest in the world for housing market risk

According to the most recent report from CoreLogic, Australia has been ranked second in the world by the International Monetary Fund regarding housing market risk (Canada took out the top spot).

Part of this is related to levels of household debt in relation to income, which is hovering around record highs, as well as how much of this debt sits on variable interest rates. Along with this comes an even smaller percentage of Australians who own their homes outright, with more and more home buyers holding significant mortgages.

Property prices rose 20.45% between March 2020 and March 2022 (roughly 19% adjusted for inflation) but are now declining sharply. Eliza Owen, CoreLogic’s Head of Residential Research Australia, reports, “While it may still be too early to call the bottom of the market, the steep price falls to date have seen limited increases in home loan defaults or forced sales.”

Feeling like homeownership might never be within reach? OwnHome could have you covered.

Can you afford mortgage repayments but not the deposit? Learn more about a deposit boost loan.
Check your eligibility
Right arrow

With rent, housing prices and the cost of living soaring, while wages are failing to match, it can feel like the odds are stacked against you - and they kind of are! You can have a good job with a good salary and still struggle to save the massive 20% deposit required to purchase a home in Australia.

That's where OwnHome can help. For just 1.1-2.2% upfront, OwnHome will loan you up to a full 20% home deposit, allowing you to get a traditional mortgage on your dream home from another bank or lender.

Check out the OwnHome upfront cost calculator to see how we stack up against other low-deposit mortgage options.

Factors impacting Australian house prices in 2023

Just why are we experiencing this sudden sharp drop in home values?

It’s a complicated question to unpack, but many contributing factors exist. Some of the many things to consider as we move beyond the pandemic are:

  • Rural downturn: In the early days of lockdowns and remote work, rural movement had a significant uptick. Looking to move to the coast or live the slower pace of country life seems to have lessened from its Covid-19 peak, though Australians do seem to have maintained some enthusiasm for this. The latest Regional Movers Index shows that net capital-to-regional movement is still up 16% on pre-pandemic levels.

  • Auction clearance rates: The nationwide clearance rates hover around 65%. This is a stronger result than we saw at the end of last year, which is a small concession. When home prices drop, we can anticipate drops in the clearance rate. This is because homeowners who have purchased properties at record-high prices are likely reluctant to sell after significant price falls.

  • High demand, limited availability: Despite the demand for real estate in Australia, low supply continues to be a major problem. In early 2023, CoreLogic reported new listings at 25.9% lower than the 5-year average. This crowds the market for available residential properties, making potential homebuyers compete for limited properties.

  • Barriers for first home buyers: While a range of schemes are in place to assist first-time home buyers in Australia, the growing size of a mortgage has put homeownership even further out of reach. According to data from the Australian Bureau of Statistics (ABS), the average house price in the capital cities stood at $851,386 (the average dwelling price in regional Australia was $578,486). Not only does that require a significant initial deposit, but it also means hefty monthly repayments — even with a low-rate home loan.

  • Interest rate rises: If you’ve heard chatter about cash rate hikes, you’ll know how much stress compounding interest rates have placed on homeowners. The cash rate determines more than just the dollar's value but rather interest rates across the board. This means that the rates on your home loan follow in turn, as do your home loan repayments, making every home more expensive to pay off over time (compounding more interest).

Rental market is under stress

It isn’t just homeowners and prospective home buyers who are struggling right now, with the rental market having faced tremendous upheaval in the pandemic aftermath.

PropTrack Market Insight reporting shows that rental vacancy rates are currently at their lowest since 2018. Renters face a more competitive market than ever, with the battle to find a suitable property in an appropriate price range often calling for months of upfront payment or sight-unseen deposits. With lower vacancy rates comes increased competition and, with that, increased rental prices. Every capital city has seen an increase in the median price of a rental, for both houses and units, according to Proptrack data.

Median Rental Prices
Sydney Median house rent - $747 | Median unit rent - $648
Canberra Median house rent - $712, Median unit rent - $585
Melbourne Median house rent - $545, Median unit rent - $504
Brisbane Median house rent - $628, Median unit rent - $523
Adelaide Median house rent -$552, Median unit rent -$443
Perth Median house rent - $582, Median unit rent - $505

Some of this, of course, is reflective of the impact of interest rate hikes on homeowners. As mortgage repayments increase, it becomes necessary to raise the rent to keep making repayments. We may also be seeing the knock-on effect of rental cuts during Covid-19 lockdowns, where many landlords made concessions on rent with thousands of people having lost sources of income.

This could place investors in an advantageous position, as potential renters are in unlimited supply. However, it does raise the risk of tenants defaulting on raised rent or rental payments failing to keep up with the amounts needed for mortgage repayment.

OwnHome note: If you are renting and looking to buy, the wage growth and inflation gap weakens potential borrowing power. This means that you will have to earn a lot more to be able to afford a deposit, and you’ll struggle more to qualify for the same level of loans.

Where is the Australian property market headed?

Property experts and various economists all have different views on what our current position means for the future of the Australian property market.

Much discussion is ongoing about whether we’ve seen the property market bottom out or whether the current stabilising that we’ve seen is a temporary pause as we continue towards the floor. For others, the RBA pausing on a rate rise in April signifies an oncoming uptick in the property market as potential home buyers rush in before rates start to climb dramatically again.

If prices continue to fall and we continue to move towards pre-pandemic house prices, it is unlikely that we will recover to quite those same levels. We’ve started to see this with the slow, staggered drops following the periods of rapid and dramatic growth. Though this might be good news to those looking to sell their homes without losing value, it could be yet another factor pushing the dream of home ownership further out of reach.


How much of a home loan deposit amount do I need?

The recommended deposit for a home loan is 20% of the purchase price. This will leave you with a loan-to-value ratio (LVR) of 80%, which for many lenders  is the minimum LVR required.

Home loans are available that will allow you to pay a smaller loan amount. For example, you may be able to find low-deposit home loans with 5%-10% deposits available. These can come with stricter eligibility requirements or higher interest rates (which can mean higher repayments).

With OwnHome, you only need 1-2% (+GST) upfront, plus enough savings to cover additional fees, such as stamp duty. We then provide a full 20% deposit, allowing you to apply for a normal 80% LVR home loan.

What is the cheapest city to rent in Australia?

For a cheaper rent alternative, the cheapest capital city to rent a unit in Australia is Adelaide, with a median weekly rent of $443. As of May 2023, the cheapest capital city to rent a house in is Melbourne, where the median weekly house rent is $545.

What is the most expensive city for rent in Australia?

Looking at the median weekly rent for both houses and units, Sydney is currently the most expensive city to rent property in. Over the pandemic, this bounced between Canberra and Sydney, but it appears to have levelled out. As of May 2023, Sydney’s median weekly rent for a unit is $648, and median house rent is $747.

How do I work out my borrowing power as a first-home buyer?

Your borrowing power is important as it determines how much money you can borrow and thus put towards your home loan deposit.

The basic way to work this out is by subtracting your net income and subtracting your expenses. Add up any sources of income, and be thorough with your expenses — from credit card limits to rent payments and regular bills. You can also use a borrowing power calculator to help get a more specific estimate.

This article is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation, or needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS), or other offer documents before making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold).
Prepared by OwnHome Services Pty Ltd ACN 664 492 059. This information does not take your personal objectives, circumstances or needs into account. Always read the disclosure documents for products and services before deciding on a product or service, and consider seeking independent legal, financial, taxation or other advice for your unique circumstances.

Latest articles

Start your pathway to homeownership
Make yourself at home! Log in and track your process. Or create an account in minutes and join thousands of Aussies already using OwnHome.