Aussie’s Spent $688 billion on property in 2021

Australians spent a whopping $688 billion in a home buying spree in 2021, which was an astounding 57 per cent more than the year before.

The latest Property and Mortgage Insights (PMI) report from PEXA has highlighted just how strong demand for Australian property has been during Covid with almost 1.4 million sales completed since early 2020.

Settlement volumes rose 31.8 per cent in 2021, with 834,008 completed property settlements nationally.

On the back of record low interest rates and rising property prices, December 2021 saw the monthly national aggregate property value reach $76.7 billion settled, with NSW accounting for almost half that figure with $31.7 billion settled.

NSW generated the highest aggregate value of sale settlements across the nation last year, with more than $262 billion settled, up 54 per cent from 2020 and up 78 per cent from 2019.

However, Queensland was the shining light for the national property market, leading the nation with the most settlements for the first time on record. Thanks to mass interstate migration, the Sunshine State recorded 232,824 settlements, which was a 40.8 per cent increase year-on-year.

The value of settlements also increased 76 per cent to $158.5 billion.

Western Australia recorded strong growth in property settlements in 2021, up 41 per cent on the year before to 94,416.

South Australia recorded another consistent year of growth with 57,615 settlements, which was a 27 per cent increase on 2020.

Victoria was the only mainland state to not see year-on-year growth from 2019 to 2020, but the market rebounded in 2021.

Last year, more than 220,400 properties, worth $186 billion, settled in Victoria, which represented a 28 per cent increase in volume and 50 per cent jump in total value.

PEXA Insights’ Chief Data and Analytics Officer PEXA Scott Butterworth said the strong property market has contributed to the record-setting pace of settlements.

“In what has been a challenging time for many Australians amidst lockdowns and uncertainty, the property market has boomed with purchasers taking advantage of record low interest rates,” Mr Butterworth said.

“We also believe many consumers have been motivated to purchase more suitable housing to incorporate new working from home arrangements, which may have led to the significant increase in aggregate value of property settlements across the nation.

“Although nudged out of top spot by Queensland for the first time on record for the number of properties sold during a year, home buyers in New South Wales as a collective have spent approximately $76 billion more on property in 2021 than any other region.

“Consumers in Victoria have experienced more lockdown-related disruption than any other mainland state. However, the state’s property market has demonstrated strong resilience, posting an increase of 50 per cent growth in aggregate property value for 2021, coming second only to New South Wales.”

The report also highlights the move towards regional areas with 2021 seeing 617,338 new loans taken out nationally, an increase of 32.5 per cent from 2020.

“It was a strong year of growth for regional centres across the country in 2020, with many Australians deciding to make the move to the seaside and countryside,” Mr Butterworth said.

“In 2021, we saw much more even growth across both inner-city and regional areas as all states began to loosen restrictions.”

Mr Butterworth said the major four banks’ grip on the home loan market is coming under pressure from non-bank lenders.

“Despite the major banks winning market-share through 2020, non-major banks have managed to improve their position and arm-wrestle market share in new loans back away from the majors in 2021,” he said.

“With interest rate movement assumed by many commentators to be imminent, the battleground for both new loans and refinances is expected to heat up during 2022.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.