With skyrocketing house prices and an ongoing construction boom, the Australian Property Market is set to hit the $9 trillion dollar mark, according to CoreLogic.
Right now, the residential real estate market is worth $8.8 Trillion dollars.
That’s worth more than Australian Superannuation ($3.1 trillion), the ASX ($2.8 trillion) and Commercial Real Estate ($978 billion)…Combined!
Australian homes only reached $8 trillion in March this year and is already on track to hit its next trillion-dollar milestone by the end of the year.
“It won’t be too long before it breaks the $9 trillion mark,” said Tim Lawless, CoreLogic research director. “We’re going through a construction boom, and housing values are rising very swiftly.”
As a result, there was more housing stock, and it was worth more, too, he said. More than half of household wealth is held in housing, with $1.9 trillion in outstanding mortgage debt.
“Household spending is the biggest component of economic activity. Therefore, we have so much attention on the housing market,” Mr. Lawless said.
While the market was still red hot, it was “not as hot” as it has been due to affordability constraints and lockdowns starting to slow down the rate of growth, he said.
But just look at the rate of growth of each capital city, consistently growing by 0.3-0.5% every single week for the last 12 months, and it will continue.
“The common factor is that low interest rates are continuing to drive demand,” he said. “It’s also that disconnect between supply and demand that is at the crux of driving housing prices higher.
“Discounting rates also showed how skewed the market is towards vendors.”
He said the rate of price growth was likely to slow down as demand from priced-out buyers eased at the same time more sellers listed their properties on the market once restrictions ease.
“If those two things happen or even if we do see supply rising, that should help rebalance the market towards buyers and dampen this rapid price growth further.”