What the average mortgage will buy you in each state

Ultra-low interest rates have offered borrowers the chance to get extraordinarily cheap home loans over the past year, and Australians have well and truly made the most of it.

Lending activity has exploded since the RBA cut interest rates to an historic low of 0.1% in November 2020, with a record value of loans issued in seven out of the past 11 months.

Since April 2021, lenders have provided more than $30 billion worth of home loans to borrowers each month, Australian Bureau of Statistics data shows, a figure that until then had never been breached.

The record demand has put huge upwards pressure on home values, with property prices surging by 24% nationally over the past 12 months according to PropTrack.

As a result, homeowners are having to take out bigger loans. In September, the average new mortgage size for people buying a home to live in hit a record $574,427 – a rise of more than $63,000 since the start of the year.

Of course, the figure varies widely from state to state, with owner-occupier loans surging by almost $100,000 in New South Wales between January and September 2021.

How far the average mortgage will stretch

Each borrower’s circumstances are different, and the average loan size is by no means the same for everyone. Other factors such as income and outgoings can also affect a person’s borrowing capacity and the amount a lender will provide.

For simplicity we have assumed a borrower taking on the average loan size within their state has saved a 20% deposit, as well as other upfront fees such as stamp duty, to provide an estimate of how far the average loan could stretch.

Based on this calculation, here’s what the average mortgage could buy you around the country.

• New South Wales
• Victoria
• Queensland
• South Australia
• Western Australia
• Rest of Australia

New South Wales

The average price of a residential property in Australia’s most expensive state surpassed $1 million for the first time on record in the March quarter, according to the ABS, and has continued to grow – forcing many buyers to take out larger loans to secure a home.

During September, the average mortgage issued to owner occupiers in NSW hit a record high of $750,119, up 22% compared to a year ago.

Assuming a borrower had saved a 20% deposit, on top of other upfront costs, they may be able to purchase a property valued at around $937,000.

While that’s below the state median property price, realestate.com.au data shows there are still plenty of regions offering properties around that price range, including greater Sydney.

Pemulwuy, located 32km west of Sydney’s CBD, is one example, recording a median property value of $935,383 as of the end of October.

Local real estate agent and sales manager at LJ Hooker Greystanes, Jason Gebran, said a major drawcard for the suburb was its lifestyle.

“It’s rapidly becoming very popular with young families, thanks to the parks, the lake, bike paths, picnic areas and good cafes,” Mr Gebran said.

“Buyers also like the low maintenance factor – homes are all fairly new and on smaller blocks so there’s no sprawling yard to look after.”

With a budget of $937,000, homebuyers may be able to secure a modern three bedroom home in Pemulwuy, similar to 13 Kalua Lane.

Closer to the city, the apartment-dense suburb of Mortlake has a median value of $930,984, which could potentially secure a modern two-bedroom unit. While outside the city, a budget of $937,000 could buy a neat family home in Chittaway Point on the Central Coast.

Victoria

Victoria currently has the third highest average dwelling price nationally, behind NSW and the ACT, reaching $891,500 in the June quarter.

Like NSW, the average loan size in Victoria has grown by 22% over the past year, reaching $605,563 in September.

Factoring in a 20% deposit plus upfront costs, a homeowner could potentially purchase a property worth around $756.000.

With a median value of $752,811, buyers could look for properties in Hadfield, 11km north of the Melbourne CBD, similar to this modern three-bedroom townhouse.

This budget will secure more space further away from the city centre, with median values in Seville, in Victoria’s picturesque wine region, sitting at $755,135.

Outside of Melbourne, properties in Cardigan on the northern Ballarat fringe have a median value of $752,588.

Queensland

Average mortgage sizes in Queensland hit a record high of $483,319 in September, potentially allowing borrowers to purchase a home around the $604,000 mark.

Buyers could look for a townhouse in Brisbane’s Morningside, which has a median suburb value of $608,034 according to realestate.com.au.

Kylee Harnisch, real estate agent for REMAX Morningside, said Morningside is a family-oriented, community-friendly suburb where restaurants, gyms, cafes and parks are within walking distance.

“It’s changed a lot over the past few years, with lots of renovation and rebuilds happening. It offers buyers from the area more value for money than in Bulimba or Hawthorn, is less busy, and still has that ‘close to everything’ feel,” Ms Harnisch said.

“You can still get a decent townhouse at an affordable price.”

A budget of around $600,000 could also get buyers a brand new four-bedroom house on 380sqm in the outer-fringe suburb of Park Ridge, 40km south of Brisbane; or a two-bedroom apartment in a boutique complex in Broadbeach on the Gold Coast.

South Australia

Average loan sizes in South Australia have grown by 13% over the past year, reaching $414,172 in September.

Factoring in a 20% deposit and other upfront fees, buyers may be able to purchase a home for around $515,000.

With a median value of $516,000, buyers could look at the seaside Adelaide suburbs of Semaphore Park and North Haven. Or closer to the city centre, properties in Richmond have a median value of $512,572.

Western Australia

New home loans for owner occupiers grew by around 8% on average in WA over the 12 months to September, with the average mortgage reaching $436,393.

Taking into account a 20% deposit plus costs, borrowers could purchase a property for around $545,000.

With a median value of $542,247 buyers could look to Aubin Grove, 30km south of Perth CBD.

Outside of Perth, homes in the picturesque town of Albany on Western Australia’s southern coast have a median value of $549,098. Currently there are several older-style freestanding homes with water views available for around this price.

The rest of Australia

Average home loan sizes in the ACT reached $555,000 in September, allowing for a purchase price of around $693,000 with a 20% deposit, on top of costs. Buyers could look at properties in Chisholm, where the median value is $690,504, as well as Page or Dunlop on the outskirts of Canberra.

In Tasmania, the average new home loan size hit $405,272 in September. With a 20% deposit of $101,000 on top of other costs, a buyer could potentially purchase a home worth around $506,000. Homes are getting snapped up in record speed across the capital city, causing prices to rise rapidly, however a two-bedroom homes in Moonah can still be secured for around the $500,000 mark. Outside of the capital, a 776sqm block of land in Bridport, north of Launceston, is advertised for offers above $450,000.

Mortgage sizes in the Northern Territory reached $396,624 in September, with a 20% deposit allowing for a property valued at up to $495,000. According to realestate.com.au data, Nakara, north of Darwin, has a median property value of $494,329.