Home values hit record highs, climbing in all states except Victoria

Property values around the country have surged to record highs, with the average Australian home now worth more than $970,000, as values soar across NSW but grind down in Victoria.

Residential values fell 0.7 per cent in Victoria to $900,000 in the June quarter – their lowest level since March last year and down from a peak of $942,000 in March 2022, Australian Bureau of Statistics data released on Tuesday shows.

Values in NSW hit a record high of $1.22 million in the June quarter.Credit: Oscar Colman

While home values have fallen in Victoria for two consecutive quarters, in NSW they hit a record high of $1.22 million in the June quarter, up 1 per cent from the previous quarter and 3.7 per cent over the year. No other state’s average is above $1 million.

The numbers could be a worry for the Reserve Bank if households feel wealthier because of the rising value of their properties and spend more as a result, defying its efforts to curb spending.

Home values climbed across the other states and territories, with Western Australia recording the biggest growth. The average value of residential property in WA rose 6.2 per cent to $816,000 in the three months to June, continuing a 21-month growth streak.

Data from CoreLogic’s Home Value Index for August showed the median home value in Perth and Adelaide, at $785,250 and $790,800 respectively, had overtaken Melbourne’s at $776,044.

The total value of homes in Australia rose to nearly $11 trillion in the June quarter, up $226 billion from the previous three months and more than four times the value of the country’s GDP.

The growth in average house values, which cumulatively jumped by more than $2 trillion during the COVID-19 pandemic, has been slowed by rising interest rates since 2022.

However, new supply in the housing market has also been limited, with 41,329 dwelling completions nationally in the March quarter – just above the nine-year low of 40,925 in the three months to June last year.

The number of homes has grown fastest in Victoria at 0.5 per cent over the quarter and 9.9 per cent over the year. Countrywide, the number grew 1.5 per cent over the quarter and 8.3 per cent over the year.

While the growth in capital city house values is tapering, it comes after years of sharp rises that have pushed housing affordability to the forefront of political debate.

Housing Minister Clare O’Neil vowed last month to find new ways to boost housing supply and curb construction costs in a sign of how fiercely contested housing policy will be in the lead-up to the next federal election.

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