Show notes – A Deep Dive into Property Market Movements Over 6 Years & 300 Episodes – How This Compares to the Last Decade & What Lies Ahead (Ep. 300)

Show Notes

In this milestone 300th episode, we take a deep dive into how Australia’s property market has changed over the last six years, what’s driving market movements today, and how these trends compare to the past decade.

From house price growth, interest rates, investor activity, and affordability to rental market shifts and future projections, we examine the key trends shaping where the property market is heading next.

1. The Growth of Australia’s Property Market

Since 2019, the total value of Australian residential property has grown from $6.95 trillion to over $11 trillion.

House prices have seen record-breaking growth cycles but also periods of sharp declines, particularly in the wake of interest rate hikes.

How does this compare to previous decades? We reflect on long-term property market trends and what’s changed in recent years.

2. Capital Cities vs. Regional Markets – Who’s Performed Best?

Before COVID-19, capital cities dominated price growth, while regional areas lagged behind.

The pandemic changed everything—regional property markets saw unprecedented demand, with some outperforming capital cities. Now, with cities like Sydney and Melbourne rebounding, is the regional boom over?

3. The Interest Rate Rollercoaster & Its Impact on the Property Market

We’ve seen record-low rates fueling a property boom, followed by rapid rate hikes, causing affordability challenges.

How did borrowing capacity shift? Buyers who could afford a $1 million property at 2% interest rates saw their budget shrink by hundreds of thousands as rates rose.

With potential rate cuts on the horizon, could borrowing power improve, and will this push prices higher again?

4. Investor Activity – The Decline & Resurgence

Investor lending hit a decade-low in 2020, but since then, investor demand has surged back, now making up 38% of all new home loans—above the long-term average of 33%.

We discuss why investors are returning to the property market and whether rising rents, tax changes, and affordability challenges will influence future investor decisions.

5. The Rental Market Crisis & Housing Supply Shortages

Rental affordability has hit breaking point, with vacancy rates at historic lows and rental prices surging.

Despite a slowdown in rental growth, rates are still increasing at double the pre-pandemic decade average of 2% per year.

The housing shortage is worsening—with construction delays, cost blowouts, and government housing targets falling short.

6. Mortgage Trends – The Rise of Brokers & Regulatory Changes

Mortgage broker-originated loans have grown from 50% to nearly 70% of all home loans.

The Best Interests Duty (BID) law introduced in 2021 has reinforced consumer confidence in brokers, given that banks are not held to the same standard.

The 2018 Royal Commission into Banking and Finance initially scrutinized broker commission models, but ultimately, the government chose to keep the structure, recognizing brokers’ role in maintaining competition.

AFCA data shows that less than 1% of all banking and finance complaints relate to mortgage brokers, highlighting their strong industry standards and consumer trust.

7. The Role of Serviceability Buffers in Housing Affordability

Since 2021, APRA has tightened serviceability buffers, requiring lenders to assess borrowers at a 3% higher rate than their loan’s actual interest rate.

These measures significantly reduced borrowing capacity, limiting how much buyers could afford. Now, with the prospect of rate cuts, could APRA adjust these buffers to ease lending restrictions?

8. Which Property Markets Are Best Positioned for Growth?

The biggest property market downturns have been in Hobart (-11.9%), ACT (-7.1%), and Melbourne (-6.4%).

Historically, Sydney and Melbourne’s high-end markets recover first after downturns—and we’re now seeing early signs of premium price growth in these cities.

Will affordability constraints hold back further growth, or are some cities poised for a strong recovery?

9. What’s Next for the Property Market? The Key Trends to Watch in 2025 and Beyond

• Interest rate cuts – When will the RBA move, and how much will it affect buyer demand?
• Housing supply crisis – Can construction recover, or will undersupply continue to push prices up?
• Migration and population growth – Will strong overseas migration keep driving housing demand in property markets?
• Lending conditions – Will APRA adjust serviceability buffers to improve borrowing capacity?
• Regional vs. capital cities – Are we seeing a shift back to Sydney and Melbourne leading the growth cycle?