Australia's housing market is now valued at $6.9 trillion

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  • Australia’s housing market was valued at $6.9 trillion at the end of 2017, according to the ABS.
  • Prices grew by 1% in the three months to December in weighted terms, leaving the increase on a year earlier at 5%.
  • Hobart remains Australia’s hottest housing market while Darwin is the coolest.

Australia’s housing market was valued at $6.9 trillion at the end of 2017, according to data from the ABS, up $92.9 billion from three months earlier.

It now stands at the highest level on record.

The ABS said prices grew by 1% across Australia’s capital cities in average weighted terms, driven primarily by a 2.6% increase in Melbourne, which helped to offset a 0.1% decline in Sydney.

As seen in the table below from the ABS, Hobart, Australia’s southern-most capital city, logged the largest increase during the quarter, outpacing growth of 1.7% in Canberra, 1.1% in Perth, 0.9% in Brisbane and 0.6% in Adelaide.

Source: ABS

Darwin, along with Sydney, was the only other capital that saw prices go backwards over the quarter with a decline of 1.5%.

By type of dwelling, the ABS said house prices grew by 1.1% across the capitals in weighted terms, near double the 0.6% increase seen in apartment prices.

This table from the ABS has all the details on the quarterly change in prices by individual capital. The RPPI is for total dwellings with the HPI for houses and ADPI for attached dwellings such as units.

Source: ABS

For the year, price growth nationwide stood at 5%, well below the 10.2% increase seen in the 12 months to June.

“The results are in line with market indicators like falling auction clearance rates, and point to a continued moderation in annual property price growth across a number of Australia’s capital cities,” said Bruce Hockman, Chief Economist for the ABS.

Hockman said the deceleration in the national growth rate largely reflected a steep slowdown in Sydney, Australia’s largest and most expensive housing market.

“The property price result of 3.8% in Sydney can be partly explained by tighter regulatory conditions and the resulting slowdown in investor credit growth,” he said.

By individual capital, growth over the year ranged from 13.1% in Hobart to 2.1% in Brisbane. Perth and Darwin, Australia’s mining capitals, saw prices decline from 12 months earlier, registering declines of 1.7% and 6.3% respectively.

Along with higher prices, the ABS said an increase in the number of residential dwellings also increased, contributing to the lift in Australia’s housing market valuation during the quarter.

Total dwellings rose by 40,400 to 10.003 million, the highest level on record.

In crude terms, the average price of a dwelling rose by $6,500 over the quarter to $686,700. Obviously this is not reflective of prices in individual markets.

With the total value of outstanding mortgage debt standing at $1.642 trillion, according to the ABS, that means Australia’s implied housing market loan to valuation (LVR) is a smidgen under 24%.

Again, this is not reflective of individual circumstances.

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