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Roughly one-quarter of buyers pay cash, but they’re all largely into a handful of suburbs.
The latest data from online property settlement platform PEXA has shown that $138 billion was spent in cash purchases of residential property across the major markets of NSW, Victoria and Queensland in FY24.
That’s approximately 26.5 per cent of all residential transactions, and a total of $138 billion, largely collected in affluent inner-city suburbs of Sydney and Melbourne, as well as beachside suburbs along south-east Queensland’s coast.
Both the volume and overall value of cash purchases was up in FY24 – rising 3.9 per cent and 14 per cent respectively. But that doesn’t necessarily mean that cash purchases are “up”, per say, as their total share of property settlements actually declined ever so slightly, from 26.9 per cent in FY23 to 26.5 per cent in FY24. In other words, cash payments have risen off the back of a more active market this year in general.
Sydney CBD, as defined by the postcode boundary of 2000, had the highest aggregate value of cash purchases through the year, with cash buyers spending $1.7 billion on more than 500 properties across the suburb, with a median price of $1.65 million.
Buyers in Surfers Paradise, Queensland, spent a similar aggregate sum of $1.6 billion, this time for a median price of $820,000 across roughly 1,200 properties.
Broadbeach attracted the third-highest level of cash spent on property, followed by Marsden Park in NSW, and Sydney’s beachside suburb of Mosman. St Leonards, on Sydney’s north shore, also made the list.
Inner-city Melbourne boasted a high level of cash buyers, with just over $1 billion spent on 262 properties for a median price of $2.7 million. Brighton was another Victorian hotspot for cash buyers.
Outer city suburbs like Marsden Park and Oran Park, which made the list of most money spent in cash on property, benefitted from a high volume of cash purchases made on land prior to development.
Tim Osborne, co-founder of Land Insight, which is owned by PEXA Group, commented on the high proportion of cash purchases in certain regional locations, such as Lismore and Moama, attributing the trend to the flow-on impact of a recent flooding.
“This could indicate that potential buyers in these regions may struggle to secure insurance and/or mortgages due to financial institutions’ concerns regarding environmental risks.
Difficulties securing affordable insurance in these areas can have a cascading impact on potential home buyers, because mortgage providers generally require all mortgaged properties to be insured,” he noted.
PEXA Group chief economist Julie Toth commented that outside of these regional trends, most cash purchases are otherwise collected in affluent areas and those attracting an older demographic, who are often embarking on a treechange and trading in a paid-off property to execute the move.
“Established buyers and investors are more likely to have access to other sources of finance to fund their purchase, or be able to buy outright,” she noted.
But with a higher level of first home buyers active this year, rather than last, she said that some cash buyers have been squeezed out.
“This shift back towards first home buyer activity helps to explain the gradual decline in the share of cash purchases that has been evident in [Queensland and NSW] in recent quarters,” she said.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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