Australian housing worth over $9 trillion after fastest annual growth in property prices since 1989
If Australia’s residential property market was a country, it would now be the world’s third richest, as rising house prices sees the total value of all homes soar by $200 million a day.
Residential real estate is now worth 28.2 per cent more than the estimated value of superannuation, the ASX and commercial real estate combined.
CoreLogic revealed the total value of residential real estate in Australia is estimated to be $9.1 trillion — an increase of $1 trillion in five months.
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The largest annual appreciation of dwelling values since June 1989 and overwhelming buyer activity across the country was the behind the surge.
Australian residential real estate was also worth about $2 trillion more than September 2020 and $3 trillion from five years ago.
CoreLogic head of research Eliza Owen said residential real estate had firmly cemented its place as Australia’s most valuable asset class.
“This puts housing values around 28.2 per cent higher than the estimated value of superannuation, the ASX and commercial real estate combined,” she said.
“The increase in value has coincided with national house values reaching $719,209 over September, and units sitting at $586,993.”
At $9.1 trillion, Australian residential property is worth than the GDP of every country on earth except the United States and China. It is also more than four times the size of Australia’s own GDP.
The surge in value follows the recent broadbased capital gains witnessed across the country, with most housing markets now beyond their peaks.
“The Australian dwelling market increased 20.3 per cent in the year to September, which is the highest rate of annual appreciation since June 1989,” Ms Owen said.
Growth in the housing market had been supported by an expectation mortgage rates would remain at record lows for an extended period of time and strong demand was buoyed by persistently low supply levels. Ms Owen said affordability was becoming a big worry for the housing market across the country.
“Affordability is an increasing challenge for many segments of the market, but particularly first home buyers who have not had the benefit of home ownership as a source of wealth through equity generation,” she said.
Runaway house prices across Australia saw the country’s banking regulator announce tough new changes around homes loans on Wednesday.
The Australian Prudential Regulation Authority (APRA) has increased the minimum interest rate buffer on home loan applications from 2.5 to 3 percentage points, which would make it harder for some borrowers to be approved.
APRA’s action is expected to reduce the typical borrower’s capacity by about 5 per cent.
Originally published as Australian housing worth over $9 trillion after fastest annual growth in property prices since 1989