CoreLogic today announced its estimate of the total value of residential real estate in Australia has reached a new high of $8.1 trillion.
The surge in value follows the recent broad-based capital gains witnessed across the country, with many markets now at new peak levels.
“The increase in the value of residential real estate has put Australian home owners in a strong equity position, with the RBA estimating just 1.3% of housing loans to be in a negative equity position at the start of 2021.
However 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. Wages growth simply isn’t keeping pace,” says Ms. Owen.
These new figures put 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.
And for those who worry about household – mortgage debt, the following chart shows there is a total of $1.9 trillion in debt against the $8.1 trillion total value of our housing market – a very low learn-to-value ratio indeed (less than 24%).
While there is a broad base property boom around Australia, the largest capital cities showed that at the "high" end of the market values markedly outpaced cheaper properties.
However, in smaller cities, capital growth was more uniform.
Overall dwelling values in Australia is 7.8% higher over the last year and currently sit around 7.6% above the previous October 2017 record high.
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Sure the markets are moving on, but not all properties are going to increase in value. Now, more than ever, correct property selection will be critical.
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