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Value of housing outstrips $9 trillion

  • October 08 2021
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Invest

Value of housing outstrips $9 trillion

By Maja Garaca Djurdjevic
October 08 2021

Five, short months after hitting $8 trillion, the total value of residential real estate in Australia has surpassed a new record of $9.1 trillion.

Value of housing

Value of housing outstrips $9 trillion

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  • October 08 2021
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Five, short months after hitting $8 trillion, the total value of residential real estate in Australia has surpassed a new record of $9.1 trillion.

Value of housing

Broad-based capital gains across the country have pushed the total value of residential real estate across the $9 trillion mark, with most housing markets said to have moved beyond their peak, new CoreLogic data has revealed.

The latest boost puts housing values around 28.2 per cent higher than the estimated value of superannuation, the ASX and commercial real estate combined.

“The value of Australian residential real estate has surpassed $9 trillion over September. This comes just five months after the market exceeded $8 trillion over April,” said CoreLogic head of research Eliza Owen.

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“The increase in value has coincided with national house values reaching $719,209 over September, and units sitting at $586,993. The Australian dwelling market increased by 20.3 per cent in the year to September, which is the highest rate of annual appreciation since June 1989.”

Moving forward, however, Ms Owen deduced that the housing market has moved past its peak rate of growth witnessed in March when national dwelling values increased by 2.8 per cent.

“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.

“The announcement this week by APRA of further tightening of serviceability buffers is a subtle approach to financial stability and far less likely to move the housing market into negative territory.”

On Wednesday, the Australian Prudential Regulation Authority (APRA) announced it would be bumping up the serviceability buffer in response to concerns around overall household debts. 

“While the banking system is well capitalised and lending standards overall have held up, increases in the share of heavily indebted borrowers, and leverage in the household sector more broadly, mean that medium-term risks to financial stability are building,” APRA chair Wayne Byres said at the time.

He noted that one in five new loans approved in the June 2021 quarter was more than six times that of a typical borrower’s income, and that regulators expected housing credit growth to outpace income growth in the months ahead.

Value of housing outstrips $9 trillion
Value of housing
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About the author

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Maja Garaca Djurdjevic is the editor of nestegg and Smart Property Investment. Email Maja at [email protected]

About the author

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Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of nestegg and Smart Property Investment. Email Maja at [email protected]

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