December quarter ABS data revealed the total value of the country’s dwelling stock rose by a further $196.8 billion to reach $10.40 trillion.
This was the third consecutive quarter and the fifth time overall that the total value of homes across the country breached the $10 trillion mark.
ABS’ latest figures were broadly in line with CoreLogic December 2023 data showing the total value of residential real estate hit $10.3 trillion.
Preliminary data showed the average price of residential dwellings hit $933,800 in the three months ending December 2023, up 1.45% from the revised $920,400 in the previous quarter.
Owner-occupiers led the quarterly increase in housing values, accounting for $9.99 trillion of the total value of residential dwellings.
Rising home values have been partly yet consistently attributed to the number of overseas arrivals since the borders reopened.
However, the low vacancy rate may be more telling of the impact of the surge in population on property prices.
“The mismatch between low supply and rising demand is an ongoing challenge for tenants amidst rapid population growth [driven by] overseas migration,” Domain chief of research Dr Nicola Powell said earlier in the year.
Consequently, the tight rental market is forcing renters to transition towards homeownership, which in turn pushes prices up.
It appears the additional 52,500 dwelling completions the ABS recorded in the previous quarter were not enough to meet the increasing housing demand.
The total number of residential dwellings currently stood at 11.13 million.
WA home value accelerates, VIC hits the brake
The total value of residential dwellings rose in all states and territories over the December quarter, according to ABS.
Quarterly gains were highest in Western Australia (up 4.93%), maintaining its position as the country’s top property market.
WA closed 2023 with an average dwelling price of $727,900.
WA has consistently outpaced other states as of late, with both its capital city and regional hotspots recording the highest growth in property values.
Following WA in the biggest quarterly price leap is SA (up 3.39%), posting a mean housing value of $731,800.
Meanwhile, NSW remained the state with the highest average dwelling value at $1.18 million, followed by the ACT at $948,500 and Victoria at $895,000.
Despite sitting in the third spot, property values in Victoria declined by 0.1% on a quarterly basis.
This follows the noted downturn in home values due to oversupply in the southeastern state, particularly in Melbourne where prices fell 0.9% in the three months to January and by 0.1% over the last year.
Home sales in Melbourne over the 2023 calendar year were estimated at 81,203, considerably lower than the 90,000 new listings hitting the market.
Experts however anticipate the Melbourne market will begin to stabilise once prices are low enough to entice buyers.
“We can expect more people in the market wanting to buy, particularly first home buyers and other owner-occupiers,” CoreLogic head of research Eliza Owen said.
Photo by FilterGrade on Unsplash
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