Australian housing market: One in four homes bought in cash PEXA research finds

While many people are struggling to afford their mortgages or scrounging to get into the property market, new analysis reveals one in four Australian homes were bought in cash.

While many people are struggling to afford their mortgages or scrounging to get into the property market, new analysis reveals one in four Australian homes were bought in cash.

Data from Property Exchange’s (PEXA) 2023 Cash Purchases Report found more than a quarter of sales across NSW, Victoria and Queensland were funded in cash, in sales totalling $129.6 billion.

Cash transactions made up 28.5 per cent of all residential property sales in 2023, up from 25.6 per cent the year before.

That mark is down, however, from the 2021 high point of $130.3 billion.

PEXA’s chief economist Julie Toth said research suggested cash buyers are likely to be older or retired, who are “asset rich” and may have even benefited from recent interest rate rises.

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

Two Gold Coast suburbs were in the top three postcodes. Picture: Glenn Hampson

The report showed which postcodes the most cash flowed to in the 2023 calendar year, with neighbouring Gold Coast suburbs Surfers Paradise and Broadbeach raking in $1.43b and $1.2b respectively.

Melbourne’s CBD ($1.32b) – where more than half of properties were paid for in full – was ranked second overall after Surfers Paradise, while the exploding Western Sydney suburb of Marsden Park saw $971 million worth of cash sales last year.

Julie Toth from PEXA. Picture: Supplied

House prices have risen despite high interest rates. Picture: Gaye Gerard

In Marsden Park, a growing area west of Blacktown, 447 of the 724 sales were for vacant land.

The top 10 was rounded out by other more traditionally ritzy locales like Mosman, St Leonards, Darling Point, and Sydney CBD, with Caloundra and Hope Island in Queensland also making the list.

Most postcodes across the three states with the highest percentages of cash purchases were in regional areas, with Gloucester in NSW topping the list at 63.9 per cent of all sales.

But the high-prices for urban centres pushed inner-city suburbs up the overall rankings, with harbourside Darling Point gaining $700m from just 84 sales at a median price of $3.35m.

Marsden Park in Sydney's west has exploded with development. Picture: Toby Zerna

Ms Toth said the high amount of cash sales partly explained the property market’s resilience in the face of rapid interest rate hikes.

“Cash-buyers are changing the dynamics of the residential property market and exerting a greater influence on overall property demand,” she said.

“Regional cash property purchases are likely being driven by retirees and downsizers looking for a ‘tree change’ or ‘sea change’ which has become a popular trend in recent years.

“In contrast, the inner-urban cash buyers are likely a combination of affluent owner-occupiers who are relocating, plus domestic and international investors buying rental properties.”

Queensland saw the highest proportion of cash sales, with a total of 33,055 residential properties purchased without a mortgage.

Originally published as Australian housing market: One in four homes bought in cash PEXA research finds