Five years on from the start of the covid-19 pandemic, the property market is in a very different place.
When the pandemic started, some banks predicted a crash in property prices. Instead, the national median price fell just 1.7%, before rebounding. By March 2025, the national median was 38.4% higher than in March 2020, according to CoreLogic. That included an increase of 56.3% in the combined regions and 33.6% in the combined capitals.
Meanwhile, the median rent in March 2025 was 37.6% higher than five years earlier. House rents (38.7%) and unit rents (35.1%) recorded similar growth in that period, even though, in the early days of the pandemic, unit rents fell sharply due to the big drop in demand from international students.
The interest rate picture has also changed significantly over the past five years. The cash rate was just 0.75% before the pandemic; the Reserve Bank of Australia (RBA) then reduced the cash rate not once but twice in March 2020, to 0.25%, before reducing the cash rate again in November 2020, to a record-low 0.10%. In 2022, the RBA started reversing course; as of March 2025, the cash rate was 4.10%.
While the economy and property market regularly experience ups and downs, we’re always here to help.
Research Exposes Big Gap Between Average and Lowest Variable Rates
The gap between the average variable interest rate and lowest variable rate on the TAG Finance and Loans comparison website, was 1.57 percent in early March, while the gap between the average and lowest fixed rate was 1.37 percent.
It is very important to note that interest rate comparisons are not always equal, and some loans may be more suitable for certain borrowers depending on their eligibility criteria and extra loan features, such as an offset account or redraw facility.
Nevertheless, the data does highlight the importance of reviewing your home loan frequently, because lenders that may have offered very competitive interest rates in the past may have since fallen behind other lenders.
To show you the considerable savings that may be available through refinancing, let’s consider some basic calculations: if a borrower had 25 years left on their mortgage and switched from a loan with a 6.50% p.a. interest rate to one with a 6.00% p.a. rate, here’s how much they could potentially save over the life of the loan:
• $46,359* if they had $500,000 left on their mortgage
• $69,538* if they had $750,000 left on their mortgage
• $92,717* if they had $1,000,000 left on their mortgage
We can research the market for you to see if there are more competitive loans available and can also discuss other potential options that might save you money.
Building Approvals Hit Two-Year High
Homebuilding approvals are heading in the right direction, opening up the possibility of more residential construction activity in the near future.
A total of 16,579 approvals were issued in January, according to the Australian Bureau of Statistics. This marked a 6.3% month-on-month increase and 21.7% year-on-year increase, and was also the highest monthly total since December 2022.
“These increases in approvals signal positive momentum heading into the new year, with households slowly returning to the market and building new homes,” Housing Industry Association economist Maurice Tapang said.
“New housing approvals had been strengthening on the back of low levels of unemployment, recovering real wages and ongoing strong population growth, even before the first interest rate cut was delivered [in February].”
Master Builders Australia chief economist Shane Garrett also welcomed the increase in approvals numbers, but warned that without a further rise, housing supply would continue to fall short of demand.
“Higher-density home building has been at woeful levels for nearly a decade with insufficient new supply in this part of the market forcing rental prices sky high,” he said.
Banks Offering Special Deals to Certain Professions
Good news if you’re a professional or essential worker – some lenders offer LMI waivers to professions such as police officers, teachers, firefighters, nurses, midwives, paramedics, accountants and lawyers.
Lender’s mortgage insurance, or LMI, is an insurance premium you generally get charged when you provide a deposit of less than 20%. For example, if you wanted to buy a $600,000 property with a 10% deposit, you would generally have to pay an LMI premium of about $13,000.
However, depending on your profession and choice of lender, you may be able to take out a low-deposit home loan without needing to pay LMI.
This LMI waiver is not something that all lenders offer to all essential workers; rather, it’s something that only some lenders offer.
Credit policies range from bank to bank, so if you’re an essential worker or a professional, get in touch to discuss your options. Depending on your circumstances, we might be able to find you a better home loan deal than you realised was possible.
If you are buying, re-financing or have any questions, contact Sal Cinque on the below information.
TAG Finance and Loans
Sal Cinque | CEO
03 9886 0800 | loans@tagfinancial.com.au
