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he Perth property market has undergone significant fluctuations over the past 20 years, reflecting broader economic conditions, shifts in population, and the volatile nature of Australia’s mining boom and bust cycles.

For property investors, understanding these trends and the drivers behind them is critical to making informed decisions.

Over the past 20 years, Australia’s capital cities have experienced varied property growth trends, with some cities seeing far higher returns than others.

Hobart has been the standout performer, with its median house price increasing by a staggering 5.9 times since 2002, from $123,300 to $727,000​, and regional Tasmania has been similarly outstanding.

Adelaide also saw strong growth, with prices increasing 4.1 times, from $166,000 to $680,000​.

Canberra’s property prices grew by 4.08 times, from $245,000 to $999,000​.

Sydney and Melbourne had significant price increases, with Sydney seeing its median house price more than triple, from $365,000 to $1.27 million​. Melbourne’s prices also more than tripled, from $241,000 to $842,000​.

Brisbane’s median house price quadrupled, from $185,000 to $750,000​.

Perth and Darwin had more moderate growth, with Perth’s prices rising 3.05 times (from $190,000 to $580,000) and Darwin’s 3.16 times (from $190,000 to $600,000)​.

From 2004 to 2024, Perth’s property market experienced cycles of rapid growth, stagnation, and decline. Looking at the cycles, lets break down the cycles that have dominated the Perth market for the past two decades.

1. 2004-2007: The Mining Boom
   • Growth period: During this time, Perth’s median house price surged due to the mining boom. Fuelled by a strong demand for resources, an influx of interstate and overseas workers drove housing demand.
   • Key suburbs for growth: Mining-affiliated suburbs such as Baldivis, Ellenbrook, and suburbs in the Pilbara region (e.g., Karratha and Port Hedland) saw unprecedented price hikes, with many investors buying there with a speculative view on future growth.
   • Median house price: The median house price in Perth rose from around $200,000 in 2004 to nearly $500,000 by 2007.

1. 2008-2012: The Global Financial Crisis (GFC) and aftermath
   • Retraction period: The GFC in 2008 triggered a cooling of Perth’s market, with declines in housing demand. Median house prices stagnated and, in some areas, declined.
   • Biggest declines: Mining towns like Karratha and Port Hedland saw the steepest drops, with some properties losing up to 40 per cent of their value as resource projects slowed. Within Perth, outer suburbs like Mandurah experienced significant declines due to overdevelopment and reduced demand, burning many investors and leaving them with little equity or gains.

1. 2013-2014: Recovery phase
   • A period of stability: As the global economy stabilised, Perth’s housing market briefly recovered. Median prices rose, though not to the levels seen during the mining boom. Inner-city and established suburbs like Subiaco, Mount Lawley, and Leederville became prime targets for buyers.

1. 2015-2020: Post-boom decline
   • Retraction period: The end of the mining construction phase caused significant job losses, leading to population stagnation and oversupply in the housing market. Between 2015 and 2017, the median house price dropped from $560,000 to $480,000.
   • Biggest declines: Outer suburbs, particularly those with new developments like Ellenbrook and Byford, were hit hard due to oversupply. Coastal suburbs like Mandurah also saw prolonged price declines.

1. 2020-2024: The COVID-19 effect and recovery
   • Growth period: The pandemic initially caused uncertainty, but government incentives, low interest rates, and the shift to remote work spurred housing demand. Perth experienced price growth, particularly in lifestyle suburbs such as Fremantle and Cottesloe, and areas with large blocks of land suitable for families.
   • Current trends: By 2024, Perth’s median house price is approximately $585,000. Growth has been supported by strong interstate migration, affordability compared to eastern capitals, and robust local demand.

Some suburbs had more notable declines than others and while many are tied in to mining, that hasn’t been the only driver of downward pressure on the Perth market.

Mandurah: A popular coastal suburb that saw its median price drop significantly during the post-mining boom years due to an oversupply of housing and reduced demand.

Karratha and Port Hedland: Resource-dependent towns experienced extreme volatility. Median house prices, which soared during the boom, plummeted as projects wound down.

Ellenbrook: This outer suburb faced challenges of oversupply and declining buyer interest during the 2015-2020 period, leading to notable value drops. However, with the train line extension to the area, this is set to boost demand and support more sustained price growth.

Looking ahead, the Perth market offers a clear lesson for investors, such as the critical nature of timing and location. Established inner-city suburbs have shown resilience over time, while outer and resource-dependent regions remain high-risk, high-reward areas.

Understanding the broader economic context and closely monitoring supply and demand dynamics can help mitigate risks, as well as the infrastructure that will support sustained demand to outer metro areas.

While regional areas have boomed in Western Australia throughout 2024, buyers should be very cautious that they aren’t purchasing in locations that are being propped up by interstate investors.

This is a phenomenon known as a two-tier market, which inevitably will retract when demand softens.

There is a real risk in the coming years that the regional areas of WA could be the next version of past ‘mining boom and bust’ if the supply and demand is imbalanced and the sustainability of key fundamentals is lacking.

roperty price growth may be slowing but an investor boom is still unfolding in Australia.

Loans to real estate investors have grown significantly faster than owner-occupier loans in all states except Victoria, which continues to underperform as a market.

Western Australia continues to dominate as Australia’s hotspot for buying activity, leading the nation in annual loan growth for owner-occupiers and investors, according to data released Friday (20 December) by Money.com.au.

Western Australia leads the nation in loan growth, ranking first in both owner-occupier and investor loans, with investor loan growth more than double the national average.

Investor loans in WA are significantly ahead of other states, with a staggering 43 per cent annual growth, far surpassing the next best state, Queensland, at 24 per cent.

In the owner occupier category, Western Australia ranks first in all areas except loans for existing properties, where it is fifth out of six. The stateʼs property market growth is primarily driven by significant increases in loans for construction, new properties, and land, highlighting the strong focus on new builds.

While Victoria’s investor loan market is weak, it leads the nation when it comes to owner-occupier loan growth. Deterred by a relatively high taxing environment, new property loans for investors have dropped by 20 per cent as landlords shun the state for other locations.

Investment action in New South Wales is behind only WA and Queensland. The loan market in NSW is stronger in investor loans, outperforming the Australian average, while owner occupier loan growth lags behind.

Record profits for property sellers

Those who are active in the property market are reaping the rewards.

New data from CoreLogic that analysed 95,000 resales over the third quarter of 2024 revealed that 95.0 per cent of property sales were profitable for the seller.

The profits were lucrative. The median nominal gain from resale reached a fresh record high of $295,000.

The gulf between Victoria and other states’ property markets was again evident.

Brisbane was the most profitable region for the second consecutive quarter, with 99.4 per cent of resales making a nominal gain. Adelaide followed closely at 99.0 per cent, while Sydney had the highest median nominal gain from resale at $370,000.

Melbourne was the only capital city to see a fall in the rate of profit-making sales over the quarter, down about 10 basis points to 90.1 per cent.

Owner-occupiers are finding the lending environment tougher than investors with ample equity and access to credit.

High interest rates make it harder for borrowers to qualify for larger loans or even loans of any size. For every increase of 0.50 percentage points in interest rates, the average person’s borrowing capacity falls by about 5 per cent, according to PropTrack senior economist Paul Ryan.

Since 2022, the Reserve Bank of Australia (RBA) has increased official interest rates by 4.25 percentage points, thereby reducing the average person’s borrowing capacity by about 40 per cent.

“If and when the RBA starts cutting rates, borrowing capacities will rise. In the meantime, the banking regulator, APRA, could achieve the same outcome by reducing a thing called the mortgage serviceability buffer,” Mr Ryan said.

Currently, to protect borrowers and the banking system, lenders need to add a buffer of at least 3 percentage points when assessing someone’s ability to repay a home loan – so if, hypothetically, you applied for a loan with an interest rate of 6.20 per cent, lenders would assess whether you’d be able to make your mortgage repayments if the rate rose to at least 9.20 per cent.

There was some good news for those planning to buy in early 2025, with the latest data suggesting conditions have turned in favour of buyers.

During this year’s spring selling season, sales volumes across the country were 4 per cent lower than the spring average in 2019-23, according to CoreLogic.

At the same time, the median amount of time required to sell a home rose from 28 to 32 days between the August and November 2024 quarters.

Helen Avis, Director of Finance, Specialist Mortgage, said for those with a deposit and credit availability, the coming year could be a positive one.

“It all points to a market in which, increasingly, vendors are having to compete with other vendors to sell their home, rather than buyers having to compete with other buyers to purchase a property.

“That suggests there will be pressure on vendors to reduce their asking prices as we head into 2025, which will give buyers more negotiating power.”

Australian property prices nationally took a slight backwards step in December but the prospects of an interest rate cut and a raft of other financial factors that will shape 2025 could have a major impact on the current downwards trajectory.

While all capital cities are seeing real estate values decelerate, the monthly and quarterly capital growth gains continue for the perennial performers Perth, Adelaide and Brisbane, while Darwin has also resurrected as market.

But Melbourne’s property market has been Australia’s weakest performing capital city for home price growth since March 2020. According to CoreLogic, it’s median dwelling value of $774,093 is well below the aforementioned trio all in the $800,000s and only above Hobart ($651,043) and Darwin ($496,871).

Sydney, the nation’s largest property market by volume and value, is also weighing on the national market.

Sydney’s fall in December of 0.6 per cent almost matched Melbourne’s (-0.7 per cent) and was a major contributor to national prices sliding 0.1 per cent. It was the first time in almost two years that real estate prices had retreated nationally.

Source: CoreLogic

Real estate prospects in 2025

Whether interest rates are cut early or late in 2025 will likely have a major impact on property prices.

While the price of most goods and services won’t be falling, the Reserve Bank expects prices to rise at a more sustainable pace in 2025.

The RBA expects headline inflation will rise in the second half of next year with the end of the electricity rebates, however, trimmed mean inflation, which takes out irregular or temporary price changes, will hit the top of the central bank’s 2-3 per cent target band by mid-next year, and drop to 2.8 per cent by the end of 2025.

Canstar’s Data Insights Director, Sally Tindall, said this year has been one of the toughest 12 months financially for millions of households battling rising rents or super-sized mortgage repayments, on top of ever-growing grocery bills and other essential expenses.

“While 2025 should bring some relief to borrowers in the form of RBA rate cuts, no one knows for certain when they will land and, in fact, there’s no iron-clad guarantee we’ll see cuts next year at all.

“The annual indexation of key support payments will be welcome relief for anyone living off these funds.

“While for many households, this extra money won’t come close to bridging the budget black hole, it will play a small part in helping these families pay for everyday essentials.

“The government’s much-anticipated Help to Buy program, when it does finally get up and running, will provide lower income first home buyers with another potential path on to the property ladder.

“While it does nothing to put a lid on property prices, which is typically the biggest hurdle for first home buyers, it gives low and middle income Australians the ability to own at least part of their own home while limiting the amount of debt they take on.”

REINSW Chief Executive Tim McKibbin told API Magazine it would likely take a rate cut to spur investors back into the market, along with a relaxation of “anti-landlord” reforms.

Strong employment figures might mean those rate cuts are delayed longer than many anticipate.

Real estate markets a mixed bag

The variation among capital city real estate markets was matched by the gap between city and regional areas.

According to PropTrack, capital city areas led the national decline, falling by 0.25 per cent over December. Regional areas were more resilient, rising by 0.03 per cent.

Anne Flaherty, REA Group Senior Economist, said that while December was the first month in which national home values declined in two years, price growth momentum had been slowing since March 2024.

“This slowdown has been seen across both capital city and regional areas, with outperforming markets such as Greater Perth also experiencing this trend.

“Contributing to the slowdown – and reversal – of price growth, the number of properties for sale has been relatively high over the second half of 2024, particularly compared to the same period in 2023 and this has given buyers more choice and we’re seeing them take more time when purchasing.

“While the impact of stage 3 tax cuts which took effect in July bolstered borrowing capacities for some buyers, this has been counteracted by softer economic conditions.

“In particular, interest rate cuts that were originally anticipated prior to 2025 have now been pushed back.

“The best performing regions for home price growth over the past 12 months can primarily be found in Queensland and Western Australia, which account for nine of the top 10 highest growth markets.”

Could a Melbourne property recovery emerge?

Not everyone was writing off the Melbourne property market.

Victoria’s property underperformance is in part due to its success at building more homes compared to the other states but it also continues to see a strong investor exodus due to significant tax deterrents decreasing demand and driving up supply.

Daniel Senia, co-Founder, Greenfield Homes, said Melbourne is currently undervalued, however, this was all likely to change in 2025.

“Lower interest rates will start to free up borrowing capacity for buyers of both established and new homes throughout 2025, however, this increase in demand for homes with continued strong demand for rental properties will lead to a short-term spike in prices, leaving many buyers in the same position they find themselves in now, albeit with higher mortgages at lower interest rates”, Mr Senia said.

“Many sellers that have been on the sidelines waiting to exit stock until demand returns will begin putting homes to market.

“This increase in supply, is unlikely to reduce prices as across most markets, particularly Melbourne, where we have most likely seen the bottom.

“The increase demand from new buyers, with better borrowing ability will negate, if not reverse, the normal market downward pricing dynamics of an increase in established stock.”

I’m here to tell you that you don’t need to be rich to invest, in fact property is one of the best ways to secure your financial future.

In 1998 the total value of housing in Australia was $1 trillion. Today, it’s a whopping $11 trillion.

Despite sentiment to the contrary, there are plenty of affordable locations for “mum and dad” investors across this great country right now.

Property prices at the affordable end of the market don’t crash. They go up, they flatline, and then they go up again. During the past 50 years the median house price in Australia has only gone down four times: 3 per cent in 1998; 4 per cent in 2011; 6 per cent in 2018; and 3.5 per cent in 2022.

I’m talking about the affordable end of the market—the median house price. Data shows that the $5 million-plus market has dropped by up to 25 per cent in certain areas and that the $2 million-plus market has declined by 15 per cent.

The Australian Tax Office releases data every couple of years that provides a snapshot of Australia’s 2.3 million property investors.

While it probably doesn’t come as a shock that CEOs and general managers top the list, it may surprise many that nurses come in third and teachers, admin assistants, sales assistants, police officers, and office clerks all make it into the top 20.

The solution to the current housing crisis won’t come from homeowners upgrading their existing homes but from first-home buyers and new investors.

Recent data from the Australian Bureau of Statistics shows that between them, the average Australian couple working in the private sector earns $191,000, while those working in the public sector earn a combined pre-tax income of $219,000.

When factoring in the 30 per cent mortgage threshold and the 3 per cent buffer the banking regulator APRA asks Australian banks to factor in when assessing borrowers’ ability to repay loans, research conducted by JLF Group proves that there are plenty of affordable suburbs for ‘mum and dad’ investors looking to break into the Australian investment market right now.

Brisbane, Perth, Adelaide and the outskirts of Melbourne retain relatively good affordability.

Affordability cushions the effects of property cycles. It also ensures that when you decide to sell your investment property, you know that anyone with a job will be able to buy it.

The key to selecting the right location for investment is to find areas with growing populations.

Those are the usually going to be locations that are close to big employers, so something close to hospitals, universities, industry areas, that type of thing.

Of course, you still need to select the right type of property in these locations. We believe houses are generally a better investment than units. That’s because houses come with land and land is what appreciates, while physical buildings depreciate from the moment they are finished.

Investors in these locations should be looking for, where possible, new builds. Newly built homes offer better tax depreciation benefits, are usually easier to rent or a higher rent than existing properties and have lower maintenance costs.

I’ve pulled together a list of recommended locations for mum and dad investors to consider. They’re surrounded by multiple job hubs and have good existing and future-planned infrastructure.

If there is one piece of advice I’d impart, it is that investors shouldn’t be put off too much by the median house price of a location when doing their research.

2025’s (relatively) affordable hotspots

SOUTHEAST QUEENSLAND

Ripley and Ripley South are our top picks. Ripley’s population is tipped to grow substantially in the next decade and there is plenty of infrastructure being built there.

It is a State Government Priority Development Area, with the State Government announcing in August it would commit $21 million to help unlock more land in the area, by providing money for road infrastructure.

Deebing Heights is forecast to grow 9.2 per cent in the next 25 years. The suburb has access to two motorways and there is a proposed 25km rail extension from Ipswich to Springfield in the works.”

It also has a school, two university campuses and three hospitals, which gives it attraction long-term.

Rosewood is another growth suburb that boasts transport infrastructure, good healthcare and education appeal and affordable median house prices that offer good rental returns.

WESTERN AUSTRALIA

The state capital has some great affordable investment opportunities for newcomers to the market.

Yanchep is our top pick in the West, not only because it has a compounding population growth projection of 12.2 per cent over the next decade, but it also has had a new train line open this year and healthcare and educational infrastructure is good.

Eglinton and Alkimos, which are both in Wanneroo, each have a projected population growth of 10 per cent in the next 10 years and boast four employment clusters – Butler, Joondalup, Mindarie Marina and Perth city.

Bertram within the City of Kwinana has plenty going for it. It’s a 15-minute drive to Rockingham Bach and is close to Garden Island, which houses the Navy base, HMAS Stirling, where more than 3,000 people work.

That makes it an ideal location for investment, with demand from Naval personnel to rent in nearby suburbs.

Mandurah is also a good option. It is part of the Peel Region which will benefit from the Transform Peel Program, a 35-year project aimed at creating new industries and jobs in the region. It aims to generate 33,000 new jobs by 2050 and is expected to inject $16 billion into the WA economy.

VICTORIA

Tarneit is the best option for new homebuyers in Victoria. With a population growth forecast at 18.1 per cent, the outer Melbourne suburb is conveniently located near the Western Freeway and Tarneit railway station.

It has about 1,500 job opportunities and for families has a school catchment with five schools and the main health service is Tarneit Family Medical Centre.

The Melton suburbs of Fraser Rise and Rockbank are up there with the best areas for investors too. Each has freeway access, and a thriving job market and five schools between them.

Rental yields in the suburbs we recommend are between 4 per cent and 4.4 per cent.

SOUTH AUSTRALIA

Virginia is the top pick for investors in South Australia. There are two schools in the area as well as major transport routes, including the Northern Expressway connecting residents to Adelaide and the surrounding areas.

Munno Para West is in the City of Playford in the northern suburbs of Adelaide. It has an extremely affordable median house price. The area is tipped to grow substantially in the coming years. It is close to the RAAF Base in Edinburgh which is home to 3500 Army and Airforce personnel.

It has access to schools and health facilities and is conveniently situated near the Elizabeth City Centre precinct.

Population forecasts suggest Virginia and Munno Para West will grow 17.1 per cent and 13.5 per cent in the next decade, respectively, which will go a long way to ensuring there is a need for housing.

NEW SOUTH WALES

Austral and West Hoxton are top of our list in NSW, each is expected to grow 8.5 per cent in the next decade and there are nine schools in each and access to Liverpool hospital.

Further to this, we like The Hills district, which is home to Castle Hill, Kellyville, North Kellyville, Rouse Hill and Box Hill.

The Hills district has benefited significantly from the New South Wales Government’s investing in the metro, adding eight new stations and five upgraded stations in recent years.

It doesn’t hurt that they are serviced by Castle Hill and Paramatta employment clusters. There are rail stations and access to major motorways, and the health infrastructure is great too.

That’s why we advise investors not to be put off a location by median house price, as it does not reflect what everything in a location is selling for.

More people in work means more money being spent, which in turn fuels inflation and puts upwards pressure on interest rates.

The news released Thursday (12 December) that Australia’s jobless rate fell in November from 4.1 to 3.9 per cent was a surprise for economists, welcome news for job seekers and a little startling to borrowers.

The resilient labour market has been one of variables under the Reserve Bank of Australia’s (RBA) magnifying glass as it weighs up its interest rates settings and these figures from the Australian Bureau of Statistics will do little to bolster sentiment around a possible rate cut.

In keeping rates on hold at 4.35 per cent at its December meeting, the RBA Board made particular note of the unemployment rate, and that was before this latest fall in the jobless rate.

“A range of indicators suggest labour market conditions remain tight.

“Employment grew strongly over the three months to October (and even stronger since), the participation rate remains close to record highs, vacancies are still relatively high and average hours worked have stabilised.

“The Board … will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.”

The economy added 9,700 full-time jobs and 6,200 part-time roles, making a net change of 15,900 positions. Economists had tipped employers would add a net 25,000 jobs in October.

So the labour market is another nail in the coffin of any perceived imminent interest rate cut.

Softer economic conditions and inflation trending downwards have sent signals that a rate cut may still come next year.

The central bank’s subtle rewording of its monetary policy decision was notable. It dropped its long-repeated warning that it might move either way on interest rates, the inference being they won’t go up.

Inflation, impacted as it is by the labour market, remains the main focus.

Speaking at a press event after the interest rates decision, RBA Governor Michele Bullock generated optimism that rate cut may still occur as soon as February.

“We’re not saying that we’ve won the battle against inflation yet,” Ms Bullock said.

“But we’re saying we’ve got a little bit more confidence that things are evolving as (predicted) in our forecasts.”

The Reserve Bank has a dual mandate to keep inflation within its 2-3 per cent target range but also to ensure the economy is as close to full employment as possible.

The RBA’s latest quarterly forecasts, released last month, had the unemployment rate ending 2024 at 4.3 per cent, which is now an unlikely result without a lot of job shedding in December.

David Bassanese, Chief Economist, Betashares, said the “blockbuster” November jobs figures pushed back the likelihood of a February RBA rate cut, perhaps to May.

Sean Langcake, Head of Macroeconomic Forecasting, Oxford Economics Australia, said a delay interest rate cuts was likely.

“The data supports our expectation that the RBA will keep rates on hold until at least May,” he said.

“The RBA board will be reluctant to ease rates while underlying inflation is above target and the labour market is operating so close to its capacity.”

Interest rates are a major influencer of household budgets and the recently released API Magazine Property Sentiment Report Q3 2024 revealed that interest rates were among the top few factors influencing their property decision-making in the next 12 months.

The report also found that buyers and sellers alike recorded sizeable upticks in the proportion who said interest rates are affecting their property-related decisions (see pp8-9).

The latest Real Estate Institute of Australia Housing Affordability Report revealed Australians are now typically spending a deeply concerning 48 per cent of their household income on their mortgage repayments.

If you want to buy the median priced home in Australia, you’ll now need to rustle up $800,000.

The latest PropTrack Home Price Index report has revealed that home prices hit a record level in November, up 5.5 per cent on a year ago.

While price growth is easing, prices in Perth, Adelaide and Brisbane continue to far exceed average income growth and fuel the national price gains.

Australian wages grew by 3.5 per cent in the year to the September quarter 2024.

For those trying to get a foot on the property ladder or investors who have been waiting for a better time to buy, they’ve seen prices skyrocket in the mid-sized capitals well beyond their modest earnings increases.

Perth real estate leapt 18.7 per cent, Adelaide 14.6 per cent and Brisbane 12.6 per cent. Even Sydney, which has slowed appreciably in 2024 since soaring in previous years, saw prices eclipse income gains by just over 1 per cent.

Those timing the market fared better in the other major cities, with Melbourne property prices slipping in 2024 and now 4.4 per cent below their peak. Hobart, Darwin and Canberra each recorded modest annual price growth but still below the average wage increase.

Report author Eleanor Creagh, Senior Economist for the REA Group, said Australian home prices hit a new peak in November after 23 consecutive months of growth.

“While housing demand has remained resilient to persistent affordability constraints, we have seen the pace of home price growth slow since earlier in the year.

“This softening in growth has occurred alongside a surge in stock for sale, giving buyers more choice and reducing the urgency to transact, however, performance has varied across markets with differing supply and demand conditions.”

According to data released by SQM Research on Tuesday (3 December), total nationwide residential property listings rose by 7.6 per cent over the month of November 2024, to 272,645 listed residential properties.

“The increase in properties hitting the market this year has been met with strong demand, but increased stock for sale has been a contributor to slowing price growth, along with affordability constraints and the sustained higher interest rate environment,” Ms Creagh said.

“In the period ahead, home prices are expected to lift, though the pace is expected to remain softer, trailing the strong growth in prices over recent years.”

According to PropTrack, after a two-and-a-half year decline Hobart was the surprise leader in terms of median dwelling value growth in November, ahead of usual candidates Perth, Brisbane and Adelaide.

What it takes to buy the ‘average’ home

With the average home now costing $800,000 and the affordability index dropping by 25 per cent over the last five years, Australian house prices are now among the least affordable in the economic bloc of more than 30 OECD countries.

Shockingly, only 10 per cent of Australian homes are affordable for average-income earners, according to a recent report by ANZ and CoreLogic.

To buy an $800,000 home without going into mortgage stress whereby loan commitments exceed 30 per cent of income, it works out to be an annual income of $178,160.04 in order to comfortably pay off that mortgage. Shared down the middle, two people would need to be earning $89,080 each year.

A standard 20 per cent deposit for an $800,000 home equates to a hefty $160,000.

Using API Magazine’s property finance calculator, the monthly instalment after the deposit for an owner-occupier paying principal and interest on a 25 year loan at the average variable interest rate of 6.83 per cent on a $640,000 home loan would be $5,568 per month.

Finding almost $67,000 a year for the mortgage is beyond the reach of many. And for first home buyers it’s even worse, with the average loan-to-income ratio for first-time buyers having increased from 3.5-times to 4.5-times over the past three years.

Affordability stifling further growth

There are signs now that property price growth around the country is grinding to a halt.

CoreLogic’s Home Value Index showed a November gain of a mere 0.1 per cent, slightly below PropTrack’s 0.15 per cent.

A surge in new listing volumes through spring, interest rates showing little sign of easing, and prices now demonstrably unaffordable for most prospective buyers, price pressure is easing.

The increase in stock for sale has seen the pace of price growth slow in Brisbane, Adelaide, Sydney and Melbourne, the latter of which is also weighed down by higher property taxes.

Perth led the rise in total listings with a significant monthly increase of 20.0 per cent, followed by Adelaide at 16.7 per cent, and Hobart with a 12.2 per cent rise. Canberra and Brisbane also recorded increases of 8.3 per cent and 8.5 per cent, respectively. Melbourne recorded a rise of 6.2 per cent, while Sydney had a smaller increase of 4.7 per cent. Conversely, Darwin was the only city to see a decrease, with listings down by 2.7 per cent.

Ms Creagh said the state capitals were definitely levelling out.

“In Sydney, greater stock for sale has been a contributor to the sharp slowing of price growth, along with affordability constraints and the sustained higher interest rate environment.

“Price momentum has been weaker in Melbourne over the past four years in part due to greater buyer choice and higher property taxes and, additionally, construction activity in Victoria has aligned more closely with population growth over the past decade.”

Adelaide remained one of the country’s top performing markets in November.

“Although the number of properties hitting the market has increased through spring, total stock on market remains constrained as new listings are quickly absorbed amid strong buyer demand,” Ms Creagh said.

“The comparative affordability of the city’s homes has contributed to persistently strong growth of recent years, though the pace of price growth is slowing with affordability having deteriorated significantly and the higher interest rate environment persisting.”

She said sellers in Perth have held the upper hand through spring and although the number of properties hitting the market has increased, total stock on market remains historically low as new listings are quickly absorbed amid strong buyer demand.

“Despite remaining the top performing market for annual home price growth, growth has slowed over the past quarter in line with the slowing momentum seen in other markets.”

For those still trying to time the market, it may be too little too late.