Property spending more than doubled in 2021

The Property and Mortgage Insights (PMI) report, released by property exchange settlement platform PEXA, highlighted a record December with the national aggregate property value reaching $76.7 billion in settlements – with NSW accounting for almost half that share. 

The report also highlighted an increase of 32 per cent in annual growth for property sale settlement volumes, with more than 834,000 completed nationally in 2021 – taking the total since the start of the pandemic to 1.4 million sales. 

The growth in the aggregate value and volume of property across Australia highlights the strong buyer demand seen throughout 2021 on the back of record-low interest rates, together with the rise in individual property prices. 

Amid lockdown and uncertainty, the property market has “boomed” with purchases taking advantage of record-low interest rates, PEXA’s chief data and analytics officer, Scott 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,” Mr Butterworth said.

Qld sale settlements hit new records

Queensland came out on top – leading the nation for annual property sale settlements for the first time – recording a year-on-year increase in volume up 41 per cent to 232,824 sale settlements to a total aggregate value of $158.5 billion.

Surfers Paradise was the most popular postcode in the state for settlements with 3,302, followed by Urangan with 3,079 – both postcodes made the top 10 nationally. 

NSW came in second for property volumes, but led all states for aggregate property values, with $262 billion sales settled in 2021 – making up more than a third of the nation’s value in property sales. 

As Victoria experienced more lockdown-related disruptions than any other state, it was the only mainland state to not see year-on-year growth from 2019 to 2020 in both aggregate property sale volumes and values. 

But the market rebounded in 2021, with the state recording more than 220,400 sale settlements (up 28 per cent year-on-year), taking its value to $186 billion in 2021.

Melbourne also held the top two postcodes – Truganina in Melbourne’s west and Craigieburn on the north – to record the highest volume of sale settlements (around 6,000).

Western Australia’s coastal town Mandurah made the “top 10” for high growth postcodes, recording 3,120 sale settlements in 2021, with the state’s figures up 41 per cent to 94,416 (taking its sales value to $51 billion).

It was also a fairly consistent year of growth for South Australia that recorded 57,615 property sale settlements (up 27 per cent from 2020) to a sales value of $31 billion. 

New loans and refinances

The report also analysed growth trends across metropolitan and regional areas, as well as consumer lending behaviour, and recorded 617,338 new loans taken out nationally, an increase of 32.5 per cent from 2020.

Nationally, three-quarters of sale settlements were funded with a new loan – which was fairly similar across all states.

The percentage of sale settlements funded with cash was highest in Queensland at 28 per cent, which may be driven by the state attracting a higher proportion of retirees able to use equity from previous homes to fund their purchases.

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

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

“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.

“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.”

[Related: New loan slides in the first months of FY22]