Jason Calleja
Jason Calleja

Senior Financial Adviser


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Housing market recovery gathers steam

The Reserve Bank of Australia and the Government may be lamenting the fact that lower interest rates and personal tax cuts haven’t had the desired effect on consumer spending, but combined with relaxed lending standards on mortgages, they have accelerated the housing market recovery.

With the cash rate falling by 75 basis points over the last 6 months, home loan interest rates are now at levels not seen since the 1950s and since APRA’s (Australian Prudential and Regulatory Authority) decision to relax the buffer borrowers are required to keep in the event interest rates go up the value of loans is rising. Owner occupier loan values were up 1.9% in August with investor loans up a higher 5.7%1, although softer rental yields mean investors are slower to return to the market than owner occupiers overall.

Confidence returns to the property market

Median prices had fallen 10% below their peaks in our largest housing markets, Sydney and Melbourne in the two years to May 2019, but have steadily increased since. Auction markets have strengthened with national clearance rates remaining above 70%2 for most weeks since mid-September and volumes set to remain high through Spring.

3 months to October 2019 12 months to October 2019 Difference from Peak Recent Peak
Sydney 5% -2.5% 10.4% Jul 2017
Melbourne 5.5% -1.0% 5.8% Nov 2017
Brisbane 1.1% -1.3% 1.6% Apr 2018
Adelaide 0.1% -0.9% -1.2% Dec 2018
Perth -1.7% -8.7% -21.6% Jun 2014
Hobart 1.0% 2.6% 0.2% Mar 2019
Darwin -1.2% -9.2% -30.6% May 2014

Source: CoreLogic Property Market Insights, Changes in Dwelling Values by State, November 2019

Opportunities in an improving market

The improving market is good news for property owners and can bring further opportunities depending on the sustained rate of recovery in your part of the market and your current and future goals. These include:

Refinancing your mortgage:

Changes to lending standards, RBA rate cuts and digital disruption in the mortgage market are combining to make the mortgage market extremely competitive. It’s a great time to see if you can get a better rate or terms on your mortgage, even from your existing lender.


Clients who have been considering downsizing but were waiting for the market to show signs of recovery may now want to consider how the numbers stack up with increased equity in their home and significant superannuation incentives on offer for those who are ready to make the move.

If you have any question about what an improving property market may mean for you, please contact your FMD adviser.

[1] CoreLogic: Monthly value of new house finance commitments, national

[2] CoreLogic: Weekly clearance rates, combined capital cities

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General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977. Rev Invest Pty Ltd is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977.