Amidst a backdrop of high interest rates, over one quarter of residential property transactions across Australia’s eastern states were funded without a mortgage attached in 2022 – according to new research released today by PEXA.
The total value of residential sale settlements in the nation’s eastern states was $478.6B in 2022, with $122.5B worth cash-funded, making up 25.6% of these purchases, as revealed in PEXA’s Cash Purchases Report.
The study provides unique insight into the source of funds used to settle property and provides analysis of the regions, property types and price points where purchases without a home loan were most common, as well as outlining the typical profiles of these buyers. In the report, cash purchases is defined as having no mortgage registered on the property title at settlement and may include alternative finance sources.
And while the previous calendar year (2022) trended similarly to 2021, which saw $124.8B of property exchanged without a mortgage attached, it is significantly higher than the $83.6B recorded in 2020, illustrating a notable shift in buyer behaviour – potentially attributable to heightened market boom post COVID.
In addition, the research found postcodes that had the highest proportion of cash purchases were mainly located in regional areas popular with older Australians.
PEXA’s Head of Research, Mike Gill, said: “The PEXA Cash Purchases report shines light on an often-overlooked segment of the property sector. Given these transactions represent more than a quarter of all residential property purchases, it is important to consider that this is a sizeable cohort of buyers who are less impacted by rising interest rates, having not taken out a loan.
“Our research found cash buyers tended to be older and more likely to be buying in regional locations, which does highlight the generational divide between borrowers. Younger homeowners are more likely to have larger home loan balances, particularly those who have purchased recently, whilst many older homeowners are likely to have paid their home loan off or be able to pay cash for a home to retire in.
“Therefore, as the RBA raises interest rates to slow the economy and fight inflation, the burden falls more toward younger Australians who are more sensitive to rising rates and less so on older generations who may in fact benefit if they have savings,” he said.
Cash purchases across the Eastern States were skewed towards regional areas
In 2022, 65.2% of cash purchases in Queensland were in regional areas, with this percentage sitting at 56.3% in New South Wales. By comparison, Victoria had a lower proportion of cash purchases in regional areas (36.8% in 2022).
These postcodes shared a number of key parallels – higher median ages, lower labour force participation and their primary family composition, according to ABS, was “couple family without children”.
Notably, the median prices for cash purchases in these postcodes were significantly lower than state averages. These postcodes also had lower than average family incomes due to the high proportion of retirees.
The top three postcodes for cash purchases by percentage in Queensland were Tara 4421 (78.4%), Russell Island 4181 (76.4%) and Gin Gin 4671 (71.9%).
In New South Wales, Emmaville 2371 (73.3%), Gloucester 2422 (65.2%) and Woombah 2469 (62.5%) led the way, while Yarram 3971 (57.5%), Paynesville 3880 (57.1%) and Metung 3904 (56.9%) ranked highest in Victoria.
Additionally, the highest transaction value associated with cash purchases was concentrated in urban centres, with higher priced properties and larger populations living in these postcodes.
Postcode 4218 (Broadbeach) in Queensland topped the eastern states with $1.33B spent on cash purchases in 2022 alone.
Blue chip metropolitan postcodes 2088 (Mosman) and 3142 (Toorak) topped the rankings in Sydney and Melbourne respectively.
Key findings of PEXA’s Cash Purchases report
$122.5B worth of residential property was purchased with cash in calendar year 2022 across the eastern states.
This was similar to 2021 ($124.8B), but up 46.5% compared to 2020 ($83.6B). NSW recorded the highest total value of cash purchases at $50.4B in 2022.
Cash purchases made up a significant proportion of overall residential sale settlements.
It was highest in QLD at 26.7% in 2022. Dwellings (houses and units) were the most popular property type with cash buyers across all states followed by vacant land.
A high proportion of cash purchases were in regional postcodes.
65.2% of QLD cash purchases in 2022 were in regional areas, as were 56.3% in NSW. The highest value of cash purchases was concentrated in urban centres. Postcode 4218 (Broadbeach) in QLD topped the eastern states with $1.33B spent on cash purchases in 2022 alone. Blue chip metropolitan postcodes 2088 (Mosman) and 3142 (Toorak) topped the rankings in Sydney and Melbourne respectively.
NSW top-20 postcodes by % of cash purchases (CY22)
| NEW SOUTH WALES¹ | % CASH PURCHASES² | MEDIAN CASH VALUE³ | MEDIAN AGE | MAIN FAMILY COMPOSITION⁴ | WEEKLY FAMILY INCOME | NOT IN LABOUR FORCE (%) |
| 2371 (EMMAVILLE) | 73.3 | $150,000 | 57 | Couple family without children (61.5%) | $1,100 | 50 |
| 2422 (GLOUCESTER) | 65.2 | $590,000 | 55 | Couple family without children (55.4%) | $1,353 | 47.4 |
| 2469 (WOOMBAH) | 62.5 | $29,7500 | 54 | Couple family without children (54.9%) | $1,136 |
47.3 |
| 2732 (BARHAM) | 62.2 | $340,000 | 56 | Couple family without children (59.9%) | $1,406 | 40.1 |
| 2647 (MULWALA) | 59.9 | $279,500 | 53 | Couple family without children (57.0%) | $1,562 | 41.6 |
| 2365 (GUYRA) | 58.1 | $273,500 | 45 | Couple family without children (48.2%) | $1,491 | 31 |
| 2423 (BULAHDELAH) | 56.6 | $587,500 | 55 | Couple family without children (54.5%) | $1,303 | 46.1 |
| 2370 (GLEN INNES) | 55.8 | $300,000 | 48 | Couple family without children (49.5%) | $1,354 | 41.8 |
| 2583 (CROOKWELL) | 55.6 | $500,000 | 52 | Couple family without children (52.7%) | $1,690 | 37.9 |
| 2372 (TENTERFIELD) | 55.1 | $310,000 | 56 | Couple family without children (58.1%) | $1,248 | 45.2 |
| 2622 (BRAIDWOOD) | 55 | $545,000 | 50 | Couple family without children (56.6%) | $1,912 | 34 |
| 2357 (COONABARABRAN) | 55 | $232,500 | 50 | Couple family without children (48.5%) | $1,409 | 38.2 |
| 2427 (HARRINGTON) | 52.2 | $660,000 | 64 | Couple family without children (70.6%) | $1,076 | 64.9 |
| 2474 (KYOGLE) | 51.8 | $545,000 | 51 | Couple family without children (49.0%) | $1,341 | 38.1 |
| 2731 (MOAMA) | 51.8 | $285,000 | 49 | Couple family without children (51.7%) | $1,731 | 38.2 |
| 2710 (DENILIQUIN) | 50.5 | $240,000 | 47 | Couple family without children (49.8%) | $1,627 | 35.7 |
| 2454 (BELLINGEN) | 50.4 | $937,500 | 47 | Couple family without children (42.7%) | $1,613 | 37.3 |
| 2590 (COOTAMUNDRA) | 50 | $360,000 | 51 | Couple family without children (53.1%) | $1,426 | 47.3 |
| 2576 (BOWRAL) | 49.9 | $1,800,000 | 56 | Couple family without children (54.8%) | $2,204 | 46.4 |
| 2420 (DUNGOG) | 49.6 | $470,000 | 50 | Couple family without children (48.6%) | $1,543 | 41.6 |
| NSW | 23.8 | $770,000 | 39 | Couple family with children (44.7%) | $2,185 | 35.5 |
VIC top-20 postcodes by % of cash purchases (CY22)
| VICTORIA¹ | % CASH PURCHASES² | MEDIAN CASH VALUE³ | MEDIAN AGE | MAIN FAMILY COMPOSITION⁴ | WEEKLY FAMILY INCOME | NOT IN LABOUR FORCE (%) |
| 3971 (YARRAM) | 58.5 | $462,500 | 54 | Couple family without children (56.4%) | $1,327 | 43.6 |
| 3880 (PAYNESVILLE) | 57.1 | $497,500 | 63 | Couple family without children (68.0%) | $1,267 | 58.8 |
| 3904 (METUNG) | 56.9 | $375,000 | 60 | Couple family without children (68.7%) | $1,370 | 47.8 |
| 3666 (EUROA) | 56.5 | $498,000 | 54 | Couple family without children (53.6%) | $1,505 | 40 |
| 3561 (ROCHESTER) | 52.4 | $450,000 | 49 | Couple family without children (49.9%) | $1,534 | 39.8 |
| 3717 (YEA) | 51.7 | $664,200 | 53 | Couple family without children (53.8%) | $1,567 | 39 |
| 3608 (NAGAMBIE) | 50.8 | $303,500 | 52 | Couple family without children (54.3%) | $1,698 | 39.8 |
| 3851 (LOCH SPORT) | 50.7 | $230,000 | 47 | Couple family without children (53.9%) | $1,521 | 49.8 |
| 3579 (KERANG) | 50.4 | $250,000 | 50 | Couple family without children (48.9%) | $1,416 | 40.7 |
| 3451 (CAMPBELLS CREEK) | 50 | $455,000 | 47 | Couple family without children (47.3%) | $1,765 | 36.7 |
| 3888 (ORBOST) | 50 | $272,500 | 54 | Couple family without children (52.9%) | $1,325 | 43.4 |
| 3730 (YARRAWONGA) | 47.9 | $481,000 | 51 | Couple family without children (53.7%) | $1,490 | 43.8 |
| 3053 (CARLTON) | 47.8 | $300,000 | 27 | Couple family without children (59.0%) | $2,064 | 30.6 |
| 3225 (POINT LONSDALE) |
47 | $1,050,000 | 61 | Couple family without children (62.3%) | $1,954 | 48.6 |
| 3909 (LAKES ENTRANCE) | 46.9 | $494,000 | 54 | Couple family without children (54.1%) | $1,300 | 48.4 |
| 3000 (MELBOURNE) | 46.8 | $556,910 | 28 | Couple family without children (69.2%) | $1,857 | 21.7 |
| 3260 (CAMPERDOWN) |
46.5 | $425,000 | 49 | Couple family without children (48.7%) | $1,688 | 36.9 |
| 3672 (BENALLA) | 45.6 | $397,000 | 51 | Couple family without children (51.9%) | $1,521 | 42.2 |
| 3002 (EAST MELBOURNE) | 45.5 | $1,050,000 | 42 | Couple family without children (71.6%) | $3,733 | 25.2 |
| 3465 (MARYBOROUGH) |
45.2 | $365,000 | 51 | Couple family without children (49.2%) | $1,261 | 49.3 |
| VIC – MEDIAN | 21 | $615,000 | 38 | Couple family with children (37.6%) | $2,136 | 32.2 |
QLD top-20 postcodes by % of cash purchases (CY22)
| QUEENSLAND¹ | % CASH PURCHASES² | MEDIAN CASH VALUE³ | MEDIAN AGE | MAIN FAMILY COMPOSITION⁴ | WEEKLY FAMILY INCOME | NOT IN LABOUR FORCE (%) |
| 4421 (TARA) | 78.4 | $69,000 | 48 | Couple family without children (46.5%) | $1,066 | 48.7 |
| 4184 (RUSSELL ISLAND) | 76.4 | $85,000 | 61 | Couple family without children (62.7%) | $954 | 60.2 |
| 4671 (GIN GIN) | 71.9 | $245,000 | 52 | Couple family without children (52.8%) | $1,200 | 46.8 |
| 4357 (MILLMERRAN) | 71.0 | $123,000 | 47 | Couple family without children (51.6%) | $1,433 | 38.5 |
| 4605 (MURGON) | 68.7 | $175,000 | 41 | Couple family without children (41.3%) | $1,176 | 47.1 |
| 4615 (NANANGO) | 65.6 | $250,000 | 52 | Couple family without children (52.7%) | $1,159 | 50.7 |
| 4819 (NELLY BAY) | 64.9 | $342,000 | 58 | Couple family without children (63.4%) | $1,372 | 42.9 |
| 4314 (BLACKBUTT) | 64.8 | $320,000 | 57 | Couple family without children (58.6%) | $1,062 | 52.5 |
| 4630 (MONTO) | 64.8 | $165,000 | 51 | Couple family without children (55.5%) | $1,329 | 35.5 |
| 4625 (GAYNDAH) | 60.6 | $210,000 | 48 | Couple family without children (51.1%) | $1,378 | 33.9 |
| 4714 (MOUNT MORGAN) | 60.2 | $139,500 | 53 | Couple family without children (46.1%) | $1,101 | 49.6 |
| 4606 (WONDAI) | 59.8 | $230,000 | 52 | Couple family without children (48.5%) | $1,343 | 45.5 |
| 4470 (CHARLEVILLE) | 59.4 | $112,000 | 42 | Couple family without children (46.7%) | $1,828 | 28.3 |
| 4854 (TULLY) | 58.9 | $225,000 | 43 | Couple family without children (47.7%) | $1,518 | 32.3 |
| 4877 (PORT DOUGLAS) | 58.9 | $360,000 | 45 | Couple family without children (59.4%) | $1,835 | 25.7 |
| 4580 (COOLOOLA COVE) | 58.5 | $530,000 | 63 | Couple family without children (71.3%) | $926 | 64.4 |
| 4804 (COLLINSVILLE) | 57.8 | $135,000 | 43 | Couple family without children (46.8%) | $1,619 | 29.0 |
| 4660 (WOODGATE) | 57.3 | $285,000 | 56 | Couple family without children (61.8%) | $1,179 | 49.3 |
| 4659 (BURRUM HEADS) | 57.1 | $495,000 | 60 | Couple family without children (67.5%) | $1,026 | 60.6 |
| 4852 (WONGALING BEACH) | 56.2 | $375,000 | 50 | Couple family without children (57.7%) | $1,461 | 35.2 |
| QLD – MEDIAN | 22.0 | $530,000 | 38 | Couple family without children (41.2%) | $2,024 | 32.0 |
PEXA data in the news
Australian Broker – Quarter of all residential properties bought with cash in 2022
Financial Review – The elite suburbs where buyers pay in cash
