Mercury (Hobart) - Property

HOUSING HITS $9TN

Australian housing has reached an epic milestone passing $9 trillion in value on the back of the fastest annual price growth since 1989, writes Matt Bell.

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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.

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.

Of the $9.107 trillion national market, Tasmania accounted for $144,447,111,123 worth of residentia­l property.

That sum was 1.6 per cent of the total value across Australia.

Naturally, NSW, Victoria and Queensland set a cracking pace with valuations of $3.757 trillion, $2.559 trillion and $1.338 trillion. That was a 41.3 per cent, 28.1 per cent and 14.7 per cent portion of the total value.

Nationally, CoreLogic has recorded a 20.3 per cent uplift in home values in the past 12 months. It was higher in Tassie, a nation-leading 27 per cent.

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 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.

 ?? ?? Residentia­l property is worth more than the ASX, commercial real estate and superannua­tion combined. Left, Eliza Owen.
Picture: Supplied
Residentia­l property is worth more than the ASX, commercial real estate and superannua­tion combined. Left, Eliza Owen. Picture: Supplied
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