The total value of Australian homes has again jumped above $10 trillion, after rising $325 billion in the June quarter.
The number of residential dwellings in Australia climbed 52,200 to 11,055,800, and the mean price of residential dwellings rose by $25,200 to $912,700, in the June quarter.
Residential values rose in all states and territories across the quarter, but most notably in NSW.
The mean price of residential dwellings in NSW ($1,167,500) remains the highest in the country, followed by the ACT ($947,900) and Victoria ($904,800).
The lowest mean price is in the Northern Territory ($512,700).
CoreLogic Head of Residential Research Eliza Owen said the national recovery in home values started in March this year, with values rising 4.9 per cent by the end of August.
“This recover has wiped out around half of the preceding downturn between April 2022 and February 2023, when national home values fell 9.1 per cent, peak to trough,” she said in the latest Property Pulse news and research.
Ms Owen said the recovery comes despite the rising cost of living, cash rate increases and low consumer sentiment.
She said three main factors could explain the recovery – overseas migration, buyers using savings or equity from previous homes, limited supply.
“Demand for housing is being pushed higher by a combination of returning overseas arrivals, and a drop off in overseas departures,” Ms Owen said.
“Last year, departures from Australia were down about 25 per cent on the pre-COVID average, while overseas arrivals ticked slightly higher on levels seen in 2019.
“Combined with a persistently low average number of people per dwelling across the capital cities, this is pushing the need for housing higher, and may be contributing to more competitiveness for properties on the market, especially considering rental vacancy rates remain around record lows.”
Ms Owen said buyers may also have used their savings or equity or profits from previous home ownership to purchase a new home.
But she said it was unclear how long this practice could continue.
“ABS national accounts data shows the household saving ratio, which measures the ratio of net saving to net disposable income, has declined to 3.7 per cent amid high inflation and debt costs. This is down from COVID-record highs of 23.6 per cent,” Ms Owen said.
She also said that while listings had jumped with the start of the spring selling season, for the four weeks to September 3, listings were still 23.4 per cent down on the five-year average.
Whether or not the recovery will continue isn’t clear, Ms Owen said.
“While there is a growing expectation that the RBA board is done hiking the cash rate, borrowing remains constrained by a relatively high serviceability buffer,” she said.
“APRA data to June showed the weighted average home loan assessment rate was just below 9 per cent, and ABS housing lending data shows mortgage lending has fallen for three of the past four months.
“Economic performance is also set to unwind, and while this is good news for the inflation and cash rate trajectory, a rise in unemployment may create a higher degree of risk for mortgage serviceability.
“CoreLogic is expecting some heat could come out of the recent recovery trend toward the end of this year, while a more robust recovery in housing values will be limited until credit conditions loosen.”