To appreciate what February’s numbers mean, it helps to understand where the market has come from.

Australia went through a significant property downturn between 2017 and mid-2019. At its lowest point, national dwelling values had fallen 8.4% from their peak. The declines were steeper in the two largest cities: Sydney fell 14.9% and Melbourne dropped 11.1% from their respective peaks.

The recovery began in June 2019, and it has been gathering pace ever since. Melbourne reaching a new record high in February 2020 is a significant milestone. It means the city has fully recovered all of those losses and is now in new territory. Sydney is on a similar path, with 10.9% annual growth eating steadily into the gap.

For anyone who held onto their property through the downturn, the rebound will feel like a relief. For buyers who purchased near the bottom of the cycle, the gains have been substantial. If you are curious about your current borrowing position given rising values, our Borrowing Power Calculator is a good place to start.

Three main factors are behind the current property market momentum.

First, mortgage rates are at historically low levels. The Reserve Bank of Australia cut rates multiple times in 2019, and lenders passed a good portion of those cuts through to borrowers. Lower rates mean lower monthly repayments, which makes buying more affordable and encourages more people to enter the market. You can use our Loan Repayment Calculator to see how different rate and loan amount combinations affect your repayments.

Second, access to housing credit has improved. After a period of tighter lending conditions following the Banking Royal Commission, lenders gradually eased some of their restrictions through 2019. More borrowers are now able to get approved, and the process has become less daunting for many applicants.

Third, buyer demand has risen. More people are actively looking to buy, which increases competition and puts upward pressure on prices. Auction clearance rates are one of the clearest signs of this. In the final week of February 2020, nearly 2,933 homes went to auction across the country, with a preliminary clearance rate of 77.1%. In Sydney alone, 1,045 homes were auctioned at an 81.4% clearance rate. Melbourne recorded 1,567 auctions with a 77.1% clearance rate. These are strong numbers by any measure.

When all three of these factors are working together, as they are right now, the result is the kind of broad-based growth we saw in February.

Not all property types are performing equally. Houses are outpacing units across most of the country right now.

In February 2020, house prices were rising in 15 regions around Australia. Unit prices were rising in just 8 regions. If you are deciding between a house and a unit, the current data suggests houses are capturing more of the upside. That said, the right choice always depends on your personal circumstances, your budget, and your goals.

Beyond the capital cities, coastal and regional lifestyle areas are also attracting strong buyer interest. As more Australians look for space, amenity, and affordability outside the major metros, well-located regional towns and coastal communities are seeing increased demand. Analysts expect this trend to continue through 2020.

If you want to explore what the Sydney and Melbourne property market in 2020 looks like in more detail, we have put together a dedicated resource to help you understand the outlook for both cities.

Whether you are a homeowner, an investor, or someone thinking about buying for the first time, the current market has implications for you.

If you already own property, rising values are building your equity position. That can open up opportunities to refinance, access equity for renovations, or use your existing property as a stepping stone to your next purchase.

If you are looking to buy, the momentum in the market is a reminder that waiting has a cost. Properties in Sydney and Melbourne are now showing double-digit annual growth. That means every month you delay, the gap between where you are and where you need to be can widen.

If you are an investor, the combination of rising values and low borrowing costs creates a window worth considering carefully. Rental demand remains solid in most capital cities, and yields in some markets are holding up well.

At Serres Property Finance, we work with buyers, refinancers, and investors across Australia. We take the time to understand your situation and find the right loan for your needs. Getting your home loan structure right matters, especially in a rising market where the stakes are higher.

Reach out to our team for a no-pressure conversation about your options. We are here to help you move forward with confidence.