The total value of Australia’s residential real estate has passed AUD 8 trillion, after almost doubling in a decade.
Australia’s Home Real Estate Value Tops AUD 8 Trillion
SYDNEY — The value of Australian homes has topped AUD 8 trillion ($6 trillion) – more than the gross domestic product of almost every country on Earth.
Real estate analyst CoreLogic on May 7, claims its estimate of the total value of the residential real estate in Australia has reached AUD 8.1 trillion ($6.3 trillion).
This is equivalent to more than AUD 310,000 ($240,732) per Australian resident and more than every country’s Gross Domestic Product (GDP), barring the United States and China.
It means the value of Australian real estate has almost doubled in a decade.
“This puts Australian residential property at around four times the size of Australian GDP, and around AUD 1 trillion ($77 billion) more than the combined value of the Australian Stock Exchange (ASX), superannuation and commercial real estate stock combined,” CoreLogic head of research Eliza Owen said in a statement.
CoreLogic’s national home value index rose 1.8 percent in April after bounding 2.8 percent in the previous month, a 32-month high.
The index is 10.2 percent higher than September’s pandemic-induced low.
CoreLogic claims that many Australian house markets — driven up by record-low interest rates and government grants — were at their peak, with national home values rising 6.8 percent in the three months to April.
“The increase in the value of the residential real estate has put Australian homeowners in a strong equity position, with the (Reserve Bank of Australia) estimating just 1.3 percent of housing loans to be in a negative equity position at the start of 2021″ Owen said.
“However, for many Australians looking to get a foot on the property ladder, the continued strength in the market is putting homeownership further out of reach despite record-low mortgage rates. Wages growth simply isn’t keeping pace.”
Comparison website Finder last week found aspiring Australian homeowners need a six-figure deposit just to get their foot in the real estate door.
More than 10 percent would need more than a decade to scrape together the required amount, a survey of 1028 first-time buyers found.
The latest Australian Bureau of Statistics (ABS) data shows the average deposit to secure a mortgage is $106,743 ($83,030) — 16 percent more than what was needed two years ago.
For almost a third of surveyed first-time buyers, the “bank of mum and dad” was the solution, with parents lending an estimated AUD 29 billion ($22 billion) to their adult kids to invest in bricks and mortar in the past 12 months.
(Edited by Vaibhav Vishwanath Pawar and Pallavi Mehra)