ABS records largest annual surge in property values
The Australian Bureau of Statistics has just recorded the largest annual surge in property values, with housing stock worth just under $10 trillion – a record $9.9 trillion – as of December 2021.
This marks an increase in total value of residential dwellings by over $2.01 trillion over the year and by $512.6 billion since Q3 2021 alone.
The number of residential dwellings rose by 44,800 to 10,761,900 in the December quarter, while their mean price rose $44,000 to $920,100.
Of the eight capital cities, Hobart saw the biggest annual increase in residential property prices (29.8%), followed by Canberra (28.8%), Brisbane (27.8%), Sydney (26.7%), Adelaide (23.9%), and Melbourne (20%). Perth and Darwin saw more ‘modest’ increases of 15.7% and 13%, respectively.
The figures reflect the year’s record-low interest rates and bespoke government incentives for the construction sector against the impacts of COVID-19, Business Insider Australia reported.
Read next: Why hasn't the housing market crashed? | Mortgage Professional Australia (mpamag.com)
However, the proportion of an average homeowner’s income required to service a mortgage also grew to 37% in the December quarter, while new loan commitments from first home buyers fell 6.9% over January 2022 – a 32.6% drop from the year before.
These trends suggest that Australians are being priced out of their own property, the Real Estate Institute of Australia said last week.
Rising interest rates and affordability concerns could still mean a house price increase of up to 8% this year before prices fall in 2023, as ANZ, CBA, and Westpac all previously predicted.
Supply-side pressure could keep prices inflated. Builders are likely to pass on the inflated costs of construction materials brought on by the Ukraine war to consumers.
The recent flooding in northern NSW and Queensland could also elevate prices and compound the affordability crisis in hard-hit regions, Business Insider Australia reported.
