Cash is king – a record number of NSW properties have been snapped up over the past financial year without a mortgage, with the value of cash purchases totalling over $60 billion.
Cash purchases also accounted for just over 27 per cent of all NSW residential property transactions over the 2023/24 financial year, according to figures released by digital conveyancing platform PEXA.
PEXA Group chief economist Julie Toth said the high volume of cash purchases in NSW was the result of multiple trends.
One was an uplift in sea-change and tree-change activity as those with fully paid off homes downsized to cheaper areas – usually moving from Sydney to regional NSW.
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The value and volume of cash purchases increased across NSW.
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There was also an increase in buyers snapping up land with cash in the hope of developing it down the track – a process that was easier to initiate without a mortgage on the block, Ms Toth said.
Natural disasters were another factor, she added. “Some of the numbers are a concern,” Ms Toth said. “A high proportion of the purchases in Lismore and other flood affected areas were with cash.
“What’s happening there is that it is difficult to get insurance (on the building) and that has a knock on effect on the mortgage that makes it hard to get a loan as banks won’t lend without insurances.
“We’re concerned we are seeing a long-lasting financial impact of weather events.”
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Lismore homes were smashed by the 2022 floods. Picture: Cath Piltz.
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NSW led Australia’s eastern states in terms of the value of cash property purchases, with aggregate spending reaching $61 billion — a 22.7 per cent increase from the previous year.
The median value of cash purchases in NSW rose by 7.3 per cent over the past year, reaching $805,000 in FY24 – the highest of the three eastern states.
Regional NSW accounted for some of the highest volumes of cash purchases, Ms Toth said.
“Coastal hinterland locations such as Gloucester, inland from the NSW Mid-Coast, and Braidwood, in the Southern Tablelands, proved especially popular with cash-buyers in FY24.
“They offer desirable lifestyle amenities, but at a significant price discount to popular nearby coastal zones (such as Batemans Bay near Braidwood, or Seal Rocks near Gloucester).”
This Lismore home was up for sale for a fraction of the previous price after getting damaged in the floods.
There were also pricey pockets of Sydney where, remarkably, some could still afford to buy without debt.
“Inner suburbs like Mosman, Darling Point, Bondi, and Randwick see a high volume of cash purchases, typically made by homeowners trading properties or investors using alternative financing.
“These areas continue to attract cash buyers despite their high property prices.”
Land Insight co-founder Tim Osborne said the impact of recent flood events loomed large.
“In flood-affected regions such as 2372 (Tenterfield), 2480 (Lismore), and 2731 (Moama), the share of cash settlements was notably high, with an increase in FY24.
Cash buys were also common in affluent areas. Picture: Sam Ruttyn
“These areas, which were severely impacted by flooding in recent years — such as the Northern Rivers floods in early 2022 and the Murray River floods in October 2022 — have experienced stricter mortgage lending conditions and rising insurance premiums.”
The PEXA Cash Purchases data focuses on residential property purchases in NSW, Victoria and Queensland using property settlement data collected via the PEXA digital property exchange.
NSW SUBURBS WITH THE HIGHEST SHARE OF CASH PURCHASES
| 2422 (GLOUCESTER) | 67.7% |
| 2622 (BRAIDWOOD) | 59.4% |
| 2372 (TENTERFIELD) | 59.4% |
| 2666 (TEMORA) | 56.6% |
| 2480 (LISMORE) | 56.1% |
| 2445 (LAKE CATHIE) | 55.8% |
| 2443 (LAURIETON) | 55.7% |
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