The ABS released its March quarter residential property price index earlier today. Over the quarter, prices increased by 1.6% nationally, led by a 3.1% surge in Sydney, leaving the annual increase at 6.9%.
It’s unremarkable in terms of percentages, but huge in actual dollar terms.
Nationally, the value of residential housing stock increased by $425.5 billion in the year to March with NSW, at $259 billion, accounting for 60.1% of the national increase.
The national increase in value, expressed in percentage terms, was 8.4% higher than a year earlier. This outpaced the 1.7% increase registered for actual housing stock.
The individual increase recorded in each state and territory is shown below.
And since the RBA began its current easing cycle in November 2011, the value of Australia’s housing stock has ballooned by $1.068 trillion to $5.468 trillion.
The gain over this period was once again led by NSW, which saw the value of its housing stock surge by $574.7 billion to $2.098 trillion.
(Another upside to that surge was reflected in the record $7.29 billion in stamp duty revenue, 75% from residential transactions, in the NSW budget today, giving the state a record $2.1 billion surplus in 2014-15.)
There has been a lot of unrealised wealth created by the RBA’s current easing cycle. Those who own their home outright, or have been holding for several years, should feel significantly wealthier than they were only a few short years ago.
The question now is how to unlock the increase in paper wealth.
If that gets answered there’ll be no more talk of further rate cuts. Indeed, markets will be talking hikes.
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