Residential real estate tops $10 trillion as Australians bank on bricks and mortar
Property remains the investment of choice for most Australians
2 min
The old adage ‘safe as houses’ has been given a shot in the arm with news that the value of Australia’s residential real estate has topped $10 trillion.
According to CoreLogic’s Monthly Housing Chart, it’s the first time national home values have hit double figures since June 2022 and places real estate as the top source of wealth for Australians.
The value of residential real estate exceeded superannuation on $3.5 trillion and listed stocks on $2.9 trillion. The commercial real estate market comes in fourth, worth $1.3 trillion.
In a volatile global economy, it’s clear that most Australians still prefer to invest in bricks and mortar with figures showing 56.3 percent of household wealth is tied up in housing.
While overall housing values in capital cities and regional centres were a mixed bag over the past 12 months to August, with the exception of Hobart, all the capital cities saw consistent growth in values over the past quarter.
Head of research at CoreLogic, Eliza Owen, said a lack of supply, net overseas migration and buyers drawing down savings, equity or profits from previous properties were all contributing factors to the steady increase in values over the past three months.
Whether this level of growth will continue, however, is uncertain.
“While there is a growing expectation that the RBA board is done hiking the cash rate, borrowing remains constrained by a relatively high serviceability buffer,” Ms Owen said. “APRA data to June showed the weighted average home loan assessment rate was just below 9 percent, and ABS housing lending data shows mortgage lending has fallen for three of the past four months.
“Economic performance is also set to unwind, and while this is good news for the inflation and cash rate trajectory, a rise in unemployment may create a higher degree of risk for mortgage serviceability.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
The construction sector is roaring back to life in some Australian states while others languish in the doldrums
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The home building market is on the rebound as building approvals rise, new data reveals.
Information from the Australian Bureau of Statistics shows that the total number of dwellings approved in August was up 7 percent seasonally adjusted, with apartments leading the way.
Private sector house approvals gained 5.8 percent in August while private sector residences excluding houses were up 9.4 percent. This follows on from a decrease of 14.6 percent in July and indicates a solid recovery in the Australian construction sector as the end of the year approaches.
Approvals for total dwellings were strongest in the two largest states, with Victoria recording a rise of 22.2 percent and NSW 12.5 percent. Western Australia also saw a significant rise of 12.3 percent.
In Queensland, the results were less positive for the sector, with total dwelling approvals falling by -26.9 percent. Tasmania also experienced a drop in approvals in August, down -10.1 percent and South Australia -6.9 percent.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
