The total value of Australia’s residential property market has reached its highest point in history, surpassing $8.1 trillion for the first time.
Consecutive months of consistent price growth across every major city and region in Australia has led to the new record high, with many markets now at their peak, fresh CoreLogic analysis reveals.
“The Australian dwelling market has reached fresh record highs for the past four months, but the end of April marked the first time the total value of Australian housing broke the $8 trillion dollar mark,” said CoreLogic head of research Eliza Owen.
In the three months to April, house prices rose by 6.8 across the country, the fastest quarterly growth rate since December 1988.
The new $8.1 trillion figure makes Aussie real estate the number one pillar of Australian wealth, the report said.
“This puts Australian residential property at around four times the size of Australian GDP, and around $1 trillion more than the combined value of the ASX, superannuation and commercial real estate stock combined,” Owen added.
The Australian superannuation industry is worth $3 trillion, less than half of Australian property, while the ASX is worth $2.7 trillion. Commercial real estate is worth less than $1 billion.
While the record high is good news for home owners, first home property buyers are getting squeezed from the market and housing affordability is suffering.
“For many Australians looking to get a foot on the property ladder, the continued strength in the market is putting home ownership further out of reach despite record low mortgage rates,” Owen said.
“Wages growth simply isn’t keeping pace.”
Australia’s regional areas have driven much of the growth in overall house prices: all capital cities put together rose by 6.4 per cent in value, while the combined regions surged by 13 per cent in the 12 months to April 2021.
However, that’s not to say Australian capital cities haven’t held their own, with Darwin proving a rising star, up 15.3 per cent from April last year. This is followed by Canberra, up 14.2 per cent, and Hobart, up 13.8 per cent.
And while growth has been consistent, the pace of growth is beginning to slow, with a number of experts also forecasting a slowdown to the long-term bullish housing market.
Lifting unemployment will be a core focus of the upcoming 2021 Federal Budget, which Treasurer Josh Frydenberg will deliver on Tuesday 11 May.