The picture across the capitals was uneven. Seven of the eight capitals recorded stronger gains for houses than units, with the house market up 2.6% nationally against just 0.2% for units. The apartment segment — particularly in inner-city suburbs reliant on overseas migrants and students — remained subdued.

Four capitals entered 2021 still below their previous price peaks. Sydney was 3.9% below its July 2017 high, while Melbourne sat 4.1% below its March 2020 peak. Perth and Darwin were significantly further from their respective 2014 highs, down 19.9% and 25.7%. For buyers in those cities, values still represented good long-term entry points.

For anyone weighing up a purchase in early 2021, it was worth taking a close look at their numbers. You can check your borrowing power to get a realistic picture of what you could afford before you start making offers.

One of the bigger concerns heading into 2021 was the fate of borrowers who had deferred their home loan repayments during COVID-19. At the peak in June 2020, APRA reported that $195 billion worth of home loans were in deferral. By October, that figure had dropped significantly to $68.2 billion as borrowers resumed repayments or refinanced.

The industry-wide deferral scheme was due to wind up in March 2021, which raised questions about whether a wave of distressed sales could flood the market. Most indicators suggested the risk was lower than initially feared. Mid-year forecasts had already revised down the number of employees expected to rely on the JobKeeper program through December by around 600,000, reflecting a labour market recovery that was outpacing early predictions.

For the broader property market, this meant a more orderly transition was likely. Rather than a sudden spike in forced listings, the expectation was for a gradual normalisation as support measures were withdrawn.

Analysts and commentators entering 2021 generally shared an optimistic view for the Australia property market 2021. Here are the themes that dominated the conversation.

For buyers, early 2021 presented a genuine window of opportunity. First home buyers in particular had access to a range of government incentives — including grants and stamp duty concessions — that reduced the upfront cost of entering the market. For younger Australians without a large deposit, a guarantor loan using a family member’s property as security was one way to bridge the gap and avoid lenders mortgage insurance.

First-time investors were in a similarly favourable position. With variable mortgage rates at record lows and rental demand recovering in most markets, the numbers were stacking up better than they had in years.

That said, it was worth staying informed about the rate environment. While the RBA’s guidance was reassuring, lending conditions can shift in ways that affect how much you can borrow. Understanding how borrowing power can change is an important part of making a sound long-term decision, regardless of where rates sit today.