The value of the Australian housing market reached a new high in September, crossing the $9 trillion mark.

CoreLogic’s latest market update showed that residential real estate market valuation hit a new all-time high at $9.1 trillion.

Eliza Owen, CoreLogic’s head of research, said consistent capital gains across the country have fueled the rise in the overall housing market value, which is now 28.2% higher than the estimated value of retirement, ASX and commercial real estate. good together.

“The appreciation has coincided with the value of national homes reaching $719,209 in September, and units of $586,993,” said Ms. Owen.

“The Australian housing market is up 20.3% in the year to September, which is the highest annual rate of increase since June 1989.”

Based on how prices are growing on a monthly basis, it’s clear that March gains are already past their 2.8% peak.

The gradual decline in monthly profits reflects the increasing struggle of many first-time homebuyers to keep up with the real estate boom.

“Affordability is an increasing challenge for many segments of the market, but especially for first-time home buyers who have not had the benefit of owning a home as a source of wealth through equity generation,” said Mrs. Owen.

How credit policy can affect price growth

Earlier this week, the RBA left the spot rate unchanged at its record low of 0.10%.

Ms Owen said that while low interest rates could still support house price growth, tighter lending conditions could potentially act as a headwind.

“Increasing wealth effects and transaction activity associated with high demand for housing have likely supported economic conditions during COVID-19.

“However, there is an increasing expectation that the housing loan space could undergo some macroprudential intervention.”

However, Ms. Owen believes that the recent move by the Australian Prudential Regulation Authority (APRA) to increase usability buffer seems to be a more “subtle” approach to financial stability.

“The housing market is much less likely to enter negative territory.”

Affordability, consumption — factors to watch out for

CoreLogic’s research director, Tim Lawless, said that while the general outlook for the housing market remains positive, concerns about affordability would likely dictate where prices would go.

“Home value growth is supported by expectations that mortgage rates will remain at record lows for an extended period of time,” Lawless said.

“These dynamics are changing as the barrier to entering the housing market gets higher.

“Attracting a deposit and financing transaction costs has become a major challenge for some sectors of the market.”

Consumption patterns will also be an important factor, especially in the post-lockdown environment.

Household savings increased by 22% during the June 2020 quarter, amid tight restrictions.

Mr Lawless said the high savings rate could boost housing demand during the pandemic.

“With 70% vaccination rates leading to greater freedoms in parts of the country, households could return to more normalized, pre-pandemic consumption and spending patterns, which could further reduce housing demand,” he said.

Photo by City of Gold Coast on Unsplash.

Top Suburbs: greenwood, upper kedron, artarmon, reservoir, midland

Get help with your real estate investment

Need help finding the right loan for your investment?

When investing in real estate, it is important to ensure that you not only have the lowest available interest rate you can get, but also have the right loan features for your needs.

Fill in a few details below and we’ll have a local mortgage broker contact you to find out what features or loan types are right for your needs. We even help with the paperwork. Moreover, an appointment is free.

We value your privacy and treat all your information seriously – you can view our privacy policy here