Australian homes are worth a combined total of more than $9 trillion, but that number has fallen for the first time in two years. The Australian Bureau of Statistics estimates the total value of residential dwellings in the June quarter was $9,983,4 trillion, down $162.4bn from $10,145,8 trillion in March. This was the first quarterly fall in the total value of residential dwellings recorded since June 2020.
The average price of a home – including houses, apartments and townhouses – was $921,500 in the June quarter of this year. That figure dropped by $18,900 from March, according to ABS data. My Housing Market Chief Economist Andrew Wilson said he wasn’t surprised by the ABS figures in what remained a buyers’ market. “I guess we could say we’re close to the trough of the market, particularly in Melbourne and Sydney, which suffered falls in houses prices during that period,” he said. “It’s like the hangover after the party and it’s been a big party over the last couple of years.”
Prospective buyers have been pulling back in recent months as the Reserve Bank of Australia introduces successive interest rate hikes to counter soaring inflation, pushing up mortgage rates as a result. And people who borrowed cheaply to purchase homes when the central bank set the cash rate at a historic low of 0.10 percent during the pandemic now face higher repayments.
The Reserve Bank raised the cash rate by 50 basis points to 2.35 percent and its board has flagged more increases are on the way before inflation is expected to cool at the end of the year. Dr Wilson said the Australian housing market was still about six months away from the prospect of higher prices, especially in Melbourne and Sydney.
“We could see prices increase in the first quarter of next year, but there’s a bit of water to go under the bridge before that happens, particularly around interest rates,” he said. According to the ABS data the total value of residential dwellings fell in NSW, Victoria, Tasmania, and the ACT in the June quarter.
Homes in NSW were worth a total of $3.939,8 trillion and made up 39.5 per cent of the total value of dwellings in the country. The mean price of a home in NSW fell by $46,400 to $1,177,700 but the state was still home to the most expensive dwellings on average. The second highest mean price of a home was in the ACT at $991,500, followed by Victoria at $938,900. The lowest mean price was in the Northern Territory at $542,100.
Despite an overall drop nationally, the mean price of a residential home actually increased in four areas. South Australia saw a rise of $23,500, followed by the Northern Territory with $10,800 and then Western Australia, where the value rose by $7,200. Queensland also recorded a small increase of $1000. The number of residential dwellings in Australia rose by 45,200 to 10,833,700 in the June quarter, with increases across all states and territories.
