Average Australian home value passes record $1 million

The value of an average Australian home has soared through the $1 million mark for the first time despite a slowdown in growth as the Albanese government fights to contain the housing affordability crisis.

Fresh figures released by the Australian Bureau of Statistics on Tuesday showed the average Australian home was worth $1,002,500 in the March quarter, up $6900 from the last three months of 2024.

While the average home value in NSW remains the highest at $1.25 million, Queensland has overtaken the ACT.Credit: Anna Kucera

The total value of the country’s $11.4 trillion residential housing market climbed $131 billion – or 1.2 per cent – in the first three months of the year.

All states and territories recorded growth in the March quarter, but the annual growth rate slowed to 5.9 per cent, down from 9.5 per cent at the same time last year.

It came as the number of residential homes grew to 11.3 million, up 53,400 from the December quarter.

The Albanese government, which swept into its second term on an overwhelming majority, has promised to improve housing affordability. However, its own independent adviser, the National Housing Supply and Affordability Council, warned that the Labor government’s National Housing Accord was set to fall 262,000 short of its 1.2 million target for new homes by the end of the decade.

Prime Minister Anthony Albanese, speaking at the National Press Club on Tuesday, said a key barrier to affordable housing was red tape.

“One of the things that we have to do is to make it easier,” he said. “Developers say that it’s just too complex [and it] adds to costs as well.”

Housing Minister Clare O’Neil has flagged the government’s second-term focus will be to overhaul planning schemes and drive up construction by slashing building regulations.

Albanese also praised the “courage” of state leaders such as NSW Premier Chris Minns, who controversially put forward a plan to turn a racecourse in Sydney’s Rosehill into a major housing development.

“I must say that the actions of state governments right around the country are very positive,” he said. “[Minns] was absolutely right ... that’s the sort of thing that we’re going to need to do. You can’t deal with supply issues without having the courage to do things like that.”

The average home value when Albanese came to power in June 2022 was $921,000, meaning it has climbed about 8.8 per cent during his first term.

While the average home value in NSW remains the highest at $1.25 million, Queensland has overtaken the ACT, coming in second with an average home value of $945,000. Victoria is fourth with an average home value of $899,700.

By state, growth in average home value over the year was led by Western Australia (up 13.4 per cent), South Australia (up 12.2 per cent) and Queensland (up 10 per cent). The average home value in Victoria, meanwhile, slipped into reverse, shedding 1.3 per cent.

Westpac head of Australian macro-forecasting, Matthew Hassan, said house price expectations had surged to the highest level since 2013 according to the Westpac-Melbourne Institute index.

“Over three-quarters of consumers expect prices rise over the next 12 months,” he said. “Consumers are particularly bullish in Queensland and NSW, but less so in Victoria.”

Home buyers, however, have remained more pessimistic, with their sentiment remaining a long way below the historical average.

Hassan said the Reserve Bank’s decision to cut interest rates in May – and the bank’s more positive tone in its communications – had boosted consumers’ housing-related sentiment.

RBA governor Michele Bullock last month revealed the board had considered slicing rates by half a percentage point before settling on a quarter percentage-point cut, marking a major departure from the cautious tone struck by the bank over the past few years. The RBA cut rates for the first time in four years at its February meeting this year before bringing it down to 3.85 per cent in May.

Lower interest rates reduce mortgage payment costs for home buyers, but can also push up demand for housing and therefore house prices.

Economists are putting the chance of a 25 basis-point rate cut in July at 80 per cent.

AMP deputy chief economist Diana Mousina said it was important to keep in mind the data reflected mean rather than median home values, meaning it would be more skewed by higher-end values.

However, she said the continued growth in home values was likely propelled by recent rate cuts.

“People can borrow more, so they want to come into the housing market and purchase something, and sellers tend to become a bit more confident too.”

Mousina said she expected home prices to lift between 5 and 6 per cent over the next 12 months.
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