Surfers Paradise, Mosman and Melbourne among suburbs with soaring cash purchases

New analysis has revealed that loan-free purchases are changing the dynamics of Australia’s $10 trillion housing market.

New analysis has revealed that loan-free purchases are changing the dynamics of Australia’s $10 trillion housing market. Picture: Supplied.

Surfers Paradise, Melbourne and Mosman are among the suburbs which lead cash purchases for residential property across Australia’s east coast housing market, new industry data shows.

Released by electronic conveyancing firm PEXA, the latest Cash Purchases Report found the total value of residential sales across Victoria, NSW and Queensland funded without a home loan rose to $129.6bn in 2023, up 1.5 per cent from the previous year.

Purchases without a loan now accounted for more than a quarter, or 28.5 per cent, of the total value of all sales, the data showed, with more than 140,000 properties sold to cash-only buyers.

More than $1.4bn of properties in Surfers Paradise were purchased without a mortgage. Picture: Supplied.

Cash purchases in regional areas were likely driven by retirees and downsizers, while a combination of relocations by wealthy owner-occupiers and investment property purchases by domestic and international buyers drove sales in inner-urban areas.

Unaffected by the surge in borrowing costs as the RBA aggressively raised interest rates six times last year, PEXA chief economist Julie Toth said cash-buyers were changing the dynamics of Australia’s $10 trillion residential property market.

“The relatively large size of this group helps to explain the property market’s resilience in 2023, despite rapid rises in interest rates,” Ms Toth said.

While rising interest rates had impacted buyers who required a mortgage, Ms Toth said the data suggested high interest rates had not affected the cash-buyer cohort to the same extent.

“This could be exacerbating the existing intergenerational wealth divide when it comes to housing affordability,” she said.

Of Australia’s east coast states, Queensland proved to be the most popular among cash buyers with 52,177 properties purchased last year which had a median value of $570,000.

In NSW, 46,339 properties were purchased with a median value of $770,000, while Victoria recorded 41,845 sales with a median value of $604,500.

According to PEXA analysis, cash buyers were more predominantly older and retired. Picture: NCA NewsWire / Max Mason-Hubers

Surfers Paradise, located on the state’s Gold Coast, recorded the highest total value of cash purchases in 2023, with over $1.4bn of properties purchased without a mortgage.

In Melbourne’s CBD, properties valued at over $1.3bn were purchased by cash buyers, while Mosman, in Sydney’s affluent North Shore recorded $944.2m of cash sales.

PEXA’s research found those purchasing a home outright were likely to be older and retired.

“They tend to have lower household incomes, but they also have fewer dependants and are more likely to be ‘asset-rich’, with accumulated property, savings and superannuation to fund their next purchase,” Ms Toth said.

The PEXA data did not detail what proportion of the cash transactions were by overseas buyers, nor did it detail the funds’ source.

However, central Sydney, central Melbourne and Surfers Paradise, which have a high number of apartment developments that are geared towards foreign buyers, were among the top 10 postcodes by value of cash purchases.