At least 25% of properties in 3 states bought with cash
More than one in 4 residential properties purchased in New South Wales, Victoria and Queensland last year was paid for entirely with cash. Research shows those buying without mortgages tend to be older and are immune to interest rate changes.
Category
📺
TVTranscript
00:00 For 2023, the PECSA research shows that across those three states, for residential purchases,
00:09 28.5% of them were purchased without a mortgage attached.
00:13 And that's actually up from previous years, which was sitting at around 25%.
00:18 Now, the locations, the postcodes, types of properties that are involved in these transactions
00:26 states that it's mainly due to older Australians who are relocating from an existing home.
00:33 So it's suggesting that those that are already in the market, who already own property, are
00:39 able to transfer and move around without taking out a mortgage.
00:43 And they are less vulnerable and less impacted by the rate rises that we've seen over this
00:48 period.
00:49 The postcodes are all for the top areas where these transactions are taking place, and mainly
00:56 in regional areas.
00:57 So it's the classic sea change, tree change locations, particularly in Queensland, where
01:06 we saw 29% of all residential purchases conducted without a mortgage in 2023 in that state.
01:14 So Surfers Paradise was the top postcode, but also places like Russell Island, Magnetic
01:22 Island, Broadbeach, and similar locations in Victoria and New South Wales.
01:28 When we think about the time period that these data cover from PEXA, 2022, 2023, we did see
01:35 interest rates rise very strongly.
01:38 And initially, we did see prices fall in response to that.
01:41 We saw transaction volumes retrace.
01:44 But the recovery happened remarkably quickly and while rates were still rising, and that's
01:50 unusual.
01:51 And we now think that part of the story of the resilience of the property market and
01:56 the recovery that we've seen is actually being driven by this quite large cohort of buyers
02:03 who are able to transact without taking out a mortgage and without that direct exposure
02:09 to interest rate rises.
02:10 [BLANK_AUDIO]