Prices in million-dollar suburbs in Australia’s most expensive city are still soaring even without the benefit of an interest rate cut.

Sydney’s outer south-west is still seeing strong price growth, even as values plunge in wealthy postcodes by the beach and near the city. 

The fact buyers needs to earn more than $155,000 a year – or 55 per cent more than the average, full-time salary of $100,000 – to even get a home loan to buy a house in a more affordable suburb a long way from the ocean is clearly no deterrent. 

Average loan sizes in New South Wales are now at a record $811,000, as high overseas immigration adds to demand in Sydney’s more affordable suburbs.

With a 20 per cent mortgage deposit, that would buy a $1.014million home with a backyard, with a higher-income borrower likely to be in financial stress spending more than a third of their salary on repayments.

Liverpool, in south-west Sydney, has a mid-point house price of $1.067million, following an 8.5 per cent surge in the year to January, CoreLogic data showed.

A short drive away in Cecil Hills, house prices soared by 13.2 per cent during the past year to $1.459million, taking it closer to greater Sydney’s mid-point of $1.474million.

The average Australian home loan now stands at a record high of $666,000, which would buy a $832,500 house, with a 20 per cent mortgage deposit, in Adelaide, Perth, Melbourne or Brisbane, but only an apartment in Sydney.

Suburbs in Australia’s most expensive city are still soaring despite high interest rates (pictured is a CoreLogic map showing how values have changed in Sydney’s south-west)

At Cecil Hills (pictured), house prices soared by 13.2 per cent during the past year to $1.459million, taking it closer to greater Sydney's mid-point of $1.474million

At Cecil Hills (pictured), house prices soared by 13.2 per cent during the past year to $1.459million, taking it closer to greater Sydney’s mid-point of $1.474million

Canstar data insights director Sally Tindall said a $52,000 increase in average, national loan sizes during the past year, even without Reserve Bank interest rate cuts, was making life harder for young people hoping to break into the housing market.

‘The fact that the average new owner-occupier loan size is climbing by around $142 a day puts pressure on those still yet to buy,’ she said.

The Australian Bureau of Statistics lending finance data for the December quarter showed average loan sizes are hitting record highs in every state except Victoria, which has a $975 investor tax turning off prospective buyers.

Victoria’s average loan size of $632,000 would buy a $790,000 house with a 20 per cent deposit in a Melbourne suburb like Dandenong in the city’s east where homes typically cost $783,749.

Queensland’s record high average loan of $635,000 – following an annual increase of $76,000 – would buy a $793,500 house in a northern Brisbane suburb like Kallangur, in Moreton Bay, where homes cost $754,981.

Western Australia’s record-high loan of $599,000 would buy a $748,750 house in a Perth suburb like Redcliffe, in the city’s inner-east, where $762,484 is the middle price.

The average mortgage in mining-rich WA last year soared by a whopping 20 per cent or $98,000 to keep up with the acceleration in Perth house prices. 

South Australia’s record average loan size of $580,000 would buy a $725,000 house in an Adelaide suburb like Pooraka in the city’s north where houses sell for $735,624.

Canstar data insights director Sally Tindall (pictured) said a $52,000 increase in average, national loan sizes was making life even harder for young people wanting to buy a home

Canstar data insights director Sally Tindall (pictured) said a $52,000 increase in average, national loan sizes was making life even harder for young people wanting to buy a home

Tasmania’s average loan is smaller at $473,000, but this is still a record high, with that kind of mortgage likely to buy a Hobart house worth $591,250 in a suburb like Lutana on the River Derwent, where homes sell for $593,957.

On the other side of Australia, the Northern Territory’s record high average loan of $465,000 would buy a $581,250 house in Darwin, in a northern suburb like Jingili where $602,729 is the mid-point. 

The Australian Capital Territory’s record average loan of $650,000 would buy a $812,500 in a Canberra suburb like Scullin where $829,898 is typical.

Australia’s Big Four banks are all expecting an interest rate cut on Tuesday next week.

The Commonwealth Bank and Westpac are expecting four rate cuts in 2025, while NAB sees an extra cut in early 2026.

Under the existing RBA cash rate of 4.35 per cent, house prices have fallen in Sydney’s more expensive suburbs but risen in the more affordable outer south-west, along with Brisbane, Adelaide and Perth. 

Ms Tindall said a series of rate cuts would boost the borrowing capacity of prospective borrowers, which would feed into even higher house prices.

‘While property prices are now starting to cool across the country, which should have a flow on effect to new loan sizes, any upcoming RBA cash rate cuts could reignite the property market in the months ahead,’ she said.

‘One RBA rate cut won’t see a person’s maximum borrowing capacity rise by a huge amount, however, it could inject confidence back into the market, particularly among investors.’

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